Trump Says US-Iran Temporary Ceasefire Agreement Has Ended, WTI Crude Rises More Than 6%
On July 8, President Trump declared the U.S.-Iran memorandum of understanding void, ending the brief ceasefire. The U.S. revoked Iranian oil export licenses and launched strikes on over 80 Iranian targets following attacks on three merchant vessels. Iran condemned the actions, threatening U.S. regional bases. Consequently, WTI crude spiked over 6% to $74.69, with Brent reaching $78.75. This policy reversal shifts market focus from anticipated Iranian supply growth back to potential Middle East supply disruptions. Future price volatility hinges on the duration of military hostilities and the severity of potential U.S. blockades on Iranian oil.
TradingKey - US President Donald Trump stated at the annual NATO summit on July 8 that he believes the US-Iran memorandum of understanding is "over." This means that the temporary ceasefire, which had just shown signs of easing tensions between the two countries, has officially come to an end.
Trump told the media in Ankara, "For me, it's over. In my opinion, it was just a waste of time."
This statement came a day after Washington took successive actions against Tehran. On July 7, local time, the U.S. Department of the Treasury's Office of Foreign Assets Control issued an announcement revoking the general license that had previously authorized Iranian oil sales. Related wind-down transactions are required to be completed before midnight Eastern Time on July 17.
On the same day, the U.S. Central Command announced that it had launched a new round of strikes against Iran, hitting over 80 targets. These included Iranian air defense systems, command and control networks, coastal radar sites, anti-ship missile capabilities, and more than 60 Islamic Revolutionary Guard Corps fast attack craft. The U.S. stated this was in response to Iran's recent attacks on three merchant vessels in the Strait of Hormuz. According to the U.S. statement, the three merchant vessels were the Marshall Islands-flagged tanker "Al Rekayyat," the Saudi-flagged tanker "Wediyn," and the Liberian-flagged tanker "Cyprus Prosperity."
Oil prices jump as market reprices "supply risks"
Following the news, international oil prices surged rapidly. WTI crude oil rose over 6% to top $74 per barrel, with Brent crude posting similar gains. As of press time, WTI crude oil futures were trading at $74.69 per barrel, while Brent crude oil futures stood at $78.75 per barrel.
[Source: TradingView]
In the preceding month, as the U.S. and Iran signed a memorandum of understanding and the U.S. granted Iran limited waivers on oil exports, the market once believed that Iranian crude supply was poised to gradually return to the international market, causing the oil price risk premium to continuously fade. Now, in less than 20 days, this memorandum has been personally terminated by Trump.
At the summit, the U.S. President expressed "disappointment" with NATO's performance regarding U.S. military actions against Iran, and singled out the UK, France, Germany, and Italy for criticism, stating they "had not done enough."
Iran Retaliates: Where is the Situation Heading?
Iran responded swiftly. The Iranian Ministry of Foreign Affairs issued a statement on the 8th, condemning the U.S. military strikes as a violation of the UN Charter and the Iraq-U.S. memorandum of understanding, and stating that the U.S. should bear the consequences of the escalating situation.
The Iranian Armed Forces also issued a stern warning, stating that all U.S. military bases in the Middle East would become "legitimate targets" for Iranian military drones. The Islamic Revolutionary Guard Corps (IRGC) subsequently released a statement declaring that, as an initial response to the U.S. airstrikes, it conducted joint missile and drone operations targeting 85 key U.S. military installations, including the headquarters of the U.S. Fifth Fleet in Bahrain and the Ali Al Salem Air Base in Kuwait.
This sudden U-turn in U.S. policy marks a shift in the global crude oil market's trading logic once again, moving from the "return of Iranian supply" back to "whether Middle East supply is under threat again."
The future direction of the market will largely depend on when the gunfire in the Strait of Hormuz subsides and whether the Trump administration will implement harsher blockades on Iranian oil exports.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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