Oil prices rose by more than five per cent on Wednesday as President Donald Trump declared that the interim agreement with Iran on peace was over.
Trump said this following U.S. strikes on Iran in reaction to attacks on three ships in the Strait of Hormuz.
The price of Brent crude oil increased by 5.6% to more than $78 a barrel. U.S. benchmark crude surged 5.8% to $74.55 a barrel.
“For me, I think it’s over,” Trump responded when asked about the status of the ceasefire.
“It’s just a waste of time dealing with them,” he said while describing Iranian leaders as “sick” and “vicious, violent people.”
He spoke ahead of the two-day NATO summit in Ankara, Turkey.
Crude prices had declined recently from spikes well above $100 a barrel to around the levels they were at before the war with Iran began in late February.
Iran and the United States agreed as part of their interim deal on ending the war to allow ships to pass through the Strait without paying charges for 60 days.
But Tehran has insisted it must control the vessels’ routes and vowed to later charge fees for passage.
The ships attacked Tuesday all appeared to be using a route close to Oman’s shore, rather than one ordered by Tehran.
The upsets for oil markets have coincided with waves of worries that the craze for artificial intelligence-related shares has pushed prices past the amount of gains in productivity and profits likely to result from massive investments in computer chip production capacity and data centers.
Analysts said the latest developments have significantly increased uncertainty over the future of negotiations and heightened concerns about stability in the global oil market.
The Chief Commodities Analyst at SEB, Bjarne Schieldrop, said the breakdown of talks had cast serious doubt on the planned 60-day negotiation process, adding that oil prices closer to $80 per barrel better reflect current market conditions.
