Oil prices surged nearly 6% on Wednesday after US President Donald Trump declared the interim ceasefire agreement with Iran is over. Brent crude climbed 5.6% to trade above $78 a barrel, while US benchmark crude rose 5.8% to $74.55 a barrel, according to livemint.com. The announcement followed US strikes on Iran in response to attacks on three ships in the Strait of Hormuz.
Trump told the Associated Press that the ceasefire was "over" and described negotiations with Iran as "a waste of time," though he said talks would continue. The US military strikes came after Iran was held responsible for attacks on commercial vessels, escalating tensions in the strategic Gulf waterway. The immediate market reaction was a sharp rally in oil prices, reflecting concerns over supply disruptions.
The jump in oil prices underscores the geopolitical risks affecting global energy markets, especially for countries reliant on oil imports. The Strait of Hormuz is a critical chokepoint for global oil shipments, and any conflict there can tighten supply and push prices higher. The last major spike in oil prices due to Middle East tensions was in 2024, when prices briefly crossed $85 a barrel amid similar unrest.
Brent crude's rise above $78 a barrel marks the highest level since early 2025. The next key market indicator will be the US Energy Information Administration's weekly petroleum status report, scheduled for release on Thursday, which will show inventory levels amid the heightened geopolitical risk.