- The United States revokes the waiver of Iranian oil sanctions, fueling the rise in crude prices.
- Trump warns of tougher measures if Iran attacks Strait of Hormuz.
- Asian stocks advance despite renewed fears of the Iran-US conflict.
Oil prices extended their rise on Thursday as Donald Trump declared the ceasefire between the United States and Iran was over and ordered new strikes against the country following attacks on ships in the Strait of Hormuz.
The two main contracts climbed around 8%, with Brent surging above $80 a barrel for the first time in two weeks, stoking fresh fears of rising inflation and a blow to the economy.
U.S. West Texas Intermediate crude futures were trading at $74.52 a barrel. Washington also revoked a temporary waiver of sanctions on Iranian oil.
However, equity markets rose mainly as technology companies benefited from a touch of cheap buying, with Seoul and Tokyo posting strong gains in early trade.
Crude soared on Wednesday as the US president – in response to retaliatory attacks already underway in the region – declared the fragile truce between the foes was over.
Trump ordered new strikes on Wednesday and warned of “much worse” if Tehran continues attacking ships in the strait, through which a fifth of the world’s oil usually passes.
“This is in retaliation for Iran’s bombing of ships yesterday,” he said in an article on Truth Social.
However, the US president earlier said he expected the latest military push to end quickly and left the door open for further negotiations.
He also claimed that Tehran had “called a little while ago” and that the Iranians were “so desperate to make a deal,” but did not provide further details about the call – including who was on the line.
He then questioned the value of any deal, calling the Iranians “pretty crazy.”
“Trump’s remarks caused sparks to fly – these comments highlighted fears of further escalation and a return to pre-MoU conditions,” said Neil Wilson of Saxo Markets, referring to the MoU that paved the way for peace talks.
But he added: “For what it’s worth, I don’t think that’s the basic case because A) Trump has a history of issuing threats and B) both sides need to return to some sort of fuzzy pre-war ‘normalcy.’
“But it clearly appears that the risk of a complete breakdown in negotiations has increased and that markets are reflecting this new dynamic.”
Stock markets were broadly higher, but sentiment remains subdued, with the latest pick-up in geopolitical tensions coming after a long period of selling in the tech sector fueled by concerns about prolonged valuations and when AI investments will see returns.
Seoul – the poster child for Asia’s AI tech boom this year – added almost 2% but remains susceptible to further decline, having already fallen more than 20% from its record high on June 19.
