Oil prices climbed more than 6 percent on Wednesday, reaching their highest level in two weeks after US President Donald Trump declared that the memorandum of understanding aimed at ending the conflict with Iran was “over,” renewing concerns over the security of Middle East energy supplies.
Brent crude futures rose $4.57, or 6.16 percent, to $78.73 a barrel during morning trading, while US West Texas Intermediate crude gained $4.23, or 6.01 percent, to $74.67 a barrel. Both benchmark contracts reached their strongest levels since June 22, extending gains after rising about 3 percent in the previous session.
Markets had already been unsettled after Washington revoked a general license that had allowed the sale of Iranian crude. Trump’s latest comments added to uncertainty by signaling that diplomatic efforts between the United States and Iran had broken down.
Speaking on Wednesday, Trump said the memorandum signed with Iran to halt the conflict was no longer valid and indicated he had no interest in resuming engagement with Tehran.
The agreement, brokered by Pakistan last month, had created a 60-day period for negotiations following months of hostilities. However, tensions escalated again after fresh US airstrikes targeted Iran.
According to US Central Command, the strikes were carried out in response to Iranian attacks on three commercial vessels traveling through the Strait of Hormuz. Iran’s Revolutionary Guards later announced they had launched strikes against US military sites in Bahrain and Kuwait early Wednesday.
The renewed military exchanges have intensified concerns over shipping through the Strait of Hormuz, one of the world’s most important energy corridors. Before the conflict began in late February, the narrow waterway handled roughly one-fifth of global oil and gas supplies.
Shipping activity has already been affected. Ship-tracking data showed at least four oil and gas tankers turned back after attempting to pass through the strait, reflecting growing safety concerns among shipping operators.
Following the signing of the truce last month, crude prices had fallen back to levels seen before the conflict, with many traders expecting additional supplies from the region to return to global markets. Investors also increased short positions in oil futures, anticipating further price declines.
The latest escalation has reversed that trend, with fears of supply disruptions once again dominating market sentiment. Countries that relied on strategic stockpiles during the conflict continue to monitor developments as uncertainty persists over future exports from the Gulf.
Meanwhile, China has taken steps to stabilize fuel supplies by easing export restrictions. Trade sources said Beijing has lifted refined fuel export limits for the remainder of July and allowed a private refinery to resume overseas shipments after a four-month suspension linked to disruptions caused by the Iran conflict.
Analysts said oil markets are likely to remain highly volatile in the coming days, with prices expected to respond quickly to any developments involving the Strait of Hormuz, military activity in the Gulf or renewed diplomatic efforts between Washington and Tehran.
