Oil prices rose at their fastest pace in two months following Trump's remarks on Iran

Oil prices posted their sharpest rise in two months during trading on July 8 after U.S. President Donald Trump said that, in his view, the ceasefire with Iran had ended. This has once again heightened concerns about disruptions to oil supplies and the safety of shipping through the Strait of Hormuz, Reuters reports.

September Brent crude oil futures surged 6.9% in a matter of moments, reaching $79.3 per barrel and hitting a more than two-week high. August WTI crude oil contracts rose by the same 6.9%—to $75.3. Prices then slowed their pace of growth to about 4%.

A spike in crude oil prices drove up energy company stocks in premarket trading on July 8. Shares of Chevron, Exxon Mobil, and ConocoPhillips rose 1.5–1.8%. Shares of Devon Energy, Occidental Petroleum, APA Corp, and Diamondback Energy rose 2–3%.

“The key question is whether what’s happening in the oil market is a short-term geopolitical shock or the beginning of longer-term problems in the energy market,” said Andreas Lipkov, chief market analyst at CMC Markets, in comments to MarketWatch. “This distinction matters because markets have begun to get used to the idea that the worst of the inflationary shock is already behind us,” he said. “If energy prices remain high, investors will have to revise not only their inflation forecasts but also their expectations regarding interest rates and economic growth.”

— “The oil market no longer simply factors in tanker shipping volumes or the risks of a supply glut. It is pricing in the likelihood that turmoil in the Middle East will resurface just as central banks were counting on cheaper energy to help bring down inflation,” — said Patrick Mannelli, market strategist at Tickmill Group (as quoted by MarketWatch).

— “The market is once again forced to price in the risk that renewed attacks on shipping or a more significant blow to U.S.-Iran relations could slow the normalization of traffic through the Strait of Hormuz,” — said Saxo Bank analyst Ole Hansen in a statement to Reuters.

— “Trump’s assertion that the memorandum of understanding has expired raises the prospect of another closure of the [Strait of Hormuz] as a new round of escalation unfolds,” — said Sauk Kavoniv, head of research at MST Marquee (as quoted by Reuters).

— “In my view, a price closer to $80 per barrel is more in line with current market factors than $70,” said Bjarne Schildrup, chief commodities analyst at SEB.

On July 8, Donald Trump declared that the ceasefire signed with Iran was “over.” Speaking at the two-day NATO summit in Turkey, the U.S. president called Iranian leaders “scum” and “sick people.”

Trump’s harsh statements came amid yet another round of escalation. On Tuesday, July 7, U.S. Central Command announced that it had struck more than 80 Iranian targets in response to attacks on three commercial tankers in the Strait of Hormuz. In addition, Washington revoked the 60-day agreement that had temporarily lifted sanctions on Iranian oil sales.

Iran's Islamic Revolutionary Guard Corps (IRGC) stated that, in response to U.S. actions, it had attacked 85 U.S. military bases in Bahrain and Kuwait.

This article was AI-translated and verified by a human editor