US President Donald Trump said the ceasefire and memorandum of understanding (MOU) reached with Iran last month is effectively over following a fresh exchange of strikes, reigniting supply concerns and sending crude prices sharply higher.
Speaking alongside NATO Secretary-General Mark Rutte at the alliance’s summit in Ankara, Pres. Trump said Washington no longer sees value in maintaining the ceasefire framework with Tehran, though he left open the possibility of continued talks. He added that further US military action against Iran remains likely after strikes overnight.
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The escalation was triggered by alleged Iranian attacks on three commercial vessels transiting the Strait of Hormuz on July 7. US Central Command said it responded with strikes on more than 80 Iranian targets, including air defense systems, command-and-control infrastructure, anti-ship missile capabilities, and over 60 Islamic Revolutionary Guard Corps (IRGC) fast boats operating in and near the strait. US Central Command described the tanker attacks as a clear violation of the June 17 agreement.
Iran’s Foreign Ministry called the US strikes a breach of the MOU and said Tehran would continue to defend its sovereignty. The IRGC said it retaliated with drone and missile strikes targeting US military facilities in Bahrain and Kuwait. Authorities in both countries reported intercepting incoming projectiles, with no material damage confirmed.
Trump said on July 8 the US is considering reinstating a naval blockade targeting Iranian ports and vessels. He also raised the possibility of strikes on civilian infrastructure, including electric plants and desalination facilities, as well as a potential move to take control of Kharg Island, home to the bulk of Iran's crude export infrastructure. He said Tuesday's strikes had reached the island but had not targeted its oil infrastructure directly.
In a parallel move, the US Treasury Department withdrew a waiver Tuesday that had allowed Iran to sell crude, a move a US official said was intended to signal that sanctions relief would depend on Tehran's conduct going forward. European Union (EU) foreign affairs chief Kaja Kallas said Iran's commitment under the MOU to reopen the Strait of Hormuz was undermined by the tanker attacks, warning that freedom of navigation through the waterway—which carries roughly a fifth of global oil supply—must remain unimpeded.
Crude jumps
Oil markets reacted swiftly to the renewed tensions. Brent crude for September delivery rose about 7% intraday to around $79/bbl, reversing a recent decline toward pre-conflict levels. WTI futures climbed roughly 7% to $75/bbl, marking one of the largest single-day gains since early June.
The Strait of Hormuz has remained central to the conflict since February, when earlier disruptions pushed Brent above $100/bbl. While the June ceasefire helped stabilize flows and prices, the latest exchange of strikes has revived fears of renewed supply disruptions.
Market participants are now watching closely to determine whether the escalation proves short-lived or signals a broader breakdown in security across the region. Volatility is likely to persist until clearer direction emerges on both military developments and the status of oil transit through the strait.
