Oil climbed nearly 6% on Wednesday after President Donald Trump said the interim agreement with Iran was “over.” He added that talks could still go on.
Brent crude rose 5.6% to more than $78 a barrel. The U.S. benchmark gained 5.8% and reached $74.55. Asked about the status of the ceasefire, Trump said: “For me, I think it’s over. It’s just a waste of time dealing with them.” He spoke on the sidelines of the two-day NATO summit in Ankara, Turkey, according to The Associated Press.
The comments followed U.S. strikes on Iran. Those were a response to attacks on three ships in the Strait of Hormuz.
A price drop wiped out
The jump undid part of a recent slide. Crude had come down from spikes well above $100 a barrel to roughly where it stood before the war with Iran started in late February.
The strait is the sticking point. Under their interim deal to end the war, Iran and the United States agreed that ships could pass for 60 days without paying charges. Tehran, though, has insisted it must control the routes vessels take, and it has vowed to charge fees later. That would overturn decades of practice in the waterway. The three ships hit on Tuesday all seemed to be using a route near Oman’s shore, not the one Tehran ordered.
Stock markets feel it
Share prices fell in Europe and Asia. Germany’s DAX lost 1.1% to 25,191.69, the CAC 40 in Paris gave up 0.9% to 8,358.67, and Britain’s FTSE 100 slid 0.8% to 10,579.09. Futures for the S&P 500 edged 0.1% lower, and those for the Dow Jones Industrial Average were down 0.4%.
Tokyo’s Nikkei 225 shed 2.1% to 66,819.05. South Korea’s Kospi dropped 5.4% to 7,246.79. That index surpassed the 9,000 level briefly last month before heavy selling of AI-linked giants hit it. Samsung Electronics fell 6.3% early Wednesday after a drop of about 7% the day before, and SK Hynix lost 5.7% after giving up early gains. Hong Kong’s Hang Seng bucked the trend with a 3% rise to 24,193.56, and Chinese AI startup Zhipu, which also trades as Knowledge Atlas Technology, gained nearly 14%.
Oil is only part of what is unsettling investors. Worries have been building that a craze for artificial intelligence shares has pushed prices beyond the productivity and profit gains that spending on chip capacity and data centers is likely to deliver.
Ipek Ozkardeskaya of Swissquote said the Iran news will drive sentiment in the short run. “Geopolitical headlines will likely determine market sentiment over the coming hours,” she wrote in a commentary. “A further deterioration in the situation could weigh further on equity valuations along with rising stress in technology.”
