Oil Jumps 7% as Trump Declares US-Iran Ceasefire Over

EcoPulse24 | New York

Crude oil prices surged more than 7% on Wednesday after US President Donald Trump declared the ceasefire with Iran was "over" at the NATO summit in Ankara, reigniting concerns about potential disruptions to energy supplies through the Strait of Hormuz. Brent crude rose 7.42% to $79.66 a barrel, while WTI crude climbed 7.01% to $75.38 a barrel, according to market data. Heating oil futures in the US surged more than 13% to $3.75 per gallon, their highest level in over a month, according to Trading Economics.

Trump's Remarks at the NATO Summit

Speaking at the NATO summit in Ankara, Turkey, President Trump said the memorandum of understanding with Iran was no longer valid and threatened additional strikes on the country. "As far as he is concerned, the ceasefire is over," according to Trading Economics, citing the president's remarks. Trump also said the United States would "probably strike the country again hard tonight," and threatened a new blockade. The remarks followed a series of incidents involving vessels transiting the Strait of Hormuz, with multiple tankers reportedly turning back from crossing the chokepoint after the IRGC struck a tanker crossing the waterway, according to Trading Economics. The US also revoked a waiver that had previously allowed Iran to sell crude oil, following attacks on vessels transiting the Strait, according to Trading Economics.

Regional Developments and GCC Response

Iran said it had targeted 85 US military sites in Bahrain and Kuwait in response to what it described as violations of the ceasefire, according to Trading Economics. Kuwait's military announced it had successfully intercepted two ballistic missiles and 13 hostile drones, with no casualties or material damage reported, according to a statement by the Kuwaiti armed forces as reported by WAM, the UAE official news agency. The UAE condemned the renewed Iranian attacks on Bahrain and Kuwait in strong terms, according to WAM. The GCC Secretary General also condemned the attacks, as did the Arab League, which renewed its rejection of what it described as aggressive Iranian attacks on the interests and territories of Arab Gulf states, according to WAM.

Impact on Global Equity and Bond Markets

The surge in oil prices weighed on equity markets across multiple regions. Germany's DAX 40 settled approximately 2.4% lower on Wednesday, its largest single-day decline since March 19, as higher energy costs fueled concerns about inflation and potential interest rate increases, according to Trading Economics. The FTSE 100 dropped more than 1.5%, while oil majors BP and Shell advanced 2.3% and 3.1% respectively, benefiting from the rise in crude prices, according to Trading Economics. US stocks also retreated, with the S&P 500 and Nasdaq 100 each falling approximately 1% and the Dow Jones Industrial Average declining roughly 1.5%, according to WAM market data.

US Treasury yields rose, with the 10-year yield reaching 4.597% and the 30-year yield at 5.089%, according to WAM market data. Markets are now pricing in at least one Federal Reserve interest rate increase by the end of 2026, according to Trading Economics. Germany's 10-year government bond yield reached its highest level since May 2026, rising to 3.09%, according to Trading Economics.

Gold fell to around $4,030 per ounce in spot trading, its lowest level since July 2, according to Trading Economics. The decline reflected concerns that energy-driven inflation could keep US interest rates elevated, reducing the appeal of non-yielding assets. China's central bank reported its largest monthly increase in gold reserves in more than two and a half years in June, underscoring continued official-sector demand, according to Trading Economics.

Energy Supply Context

The escalation reversed earlier market expectations of a supply surplus, after OPEC+ had raised production quotas and Middle Eastern producers moved to increase output, according to Trading Economics. Russia also announced it would halt diesel exports and shift to being a net importer, compounding upward pressure on distillate fuel markets, according to Trading Economics. Heating oil prices had dropped sharply after peaking at a record high of $4.70 per gallon in late March, before rebounding to trade more than 40% above pre-conflict levels, according to Trading Economics.

US crude oil inventories rose by 2.998 million barrels to 411.3 million barrels in the week ended July 3, the first increase after ten consecutive weeks of declines, compared with market expectations for a 2.4 million-barrel draw, according to the US Energy Information Administration. Gasoline inventories declined by 1.904 million barrels, while distillate stockpiles fell by 4.98 million barrels, compared with forecasts for an increase, according to EIA data.

EcoPulse24 Analysis

EcoPulse24 Analysis: Wednesday's sharp move in oil prices underscores the persistent sensitivity of global energy markets to developments around the Strait of Hormuz. The re-escalation of US-Iran tensions, coming at a time when OPEC+ had already loosened supply constraints, creates a more uncertain supply picture heading into the second half of 2026. For GCC oil-exporting economies, higher realized oil prices provide a degree of short-term fiscal relief. Rising distillate prices alongside surging crude may translate into broader inflationary pressures across transportation and manufacturing sectors globally. Investors and policymakers will be watching closely for any further diplomatic or security developments that could shift the current energy market trajectory.