BANGKOK, July 8: Oil prices surged more than 6% after US President Donald Trump said Wednesday that the interim agreement with Iran is "over," though he will allow talks to continue.
Trump made the comments following US strikes on Iran in reaction to attacks on three ships in the Strait of Hormuz. The price of Brent crude oil jumped 6.3% to$78.80 a barrel. US benchmark crude surged 6.4% to $75.00 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 on the sidelines 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. That would upend decades of practice in the waterway. 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 raise uncertainties over inflation and other economic trends. They have also 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.
"As such, geopolitical headlines will likely determine market sentiment over the coming hours. A further deterioration in the situation could weigh further on equity valuations along with rising stress in technology," Ipek Ozkardeskaya of Swissquote said in a commentary.
In share trading, Germany's DAX shed 2.4% to 24,866.26 and the CAC 40 in Paris gave up 2.2% to 8,427.23. Britain's FTSE 100 slid 1.7% to 10,484.45.
In Asian trading, Tokyo's Nikkei 225 lost 2.1% to 66,819.05, while the Kospi in South Korea shed 5.4%, to 7,246.79.
The South Korean index has soared and then fallen back, briefly surpassing the 9,000 level last month and then succumbing to bouts of heavy selling of big AI-related tech shares like Samsung Electronics and SK Hynix. Samsung fell 6.3% early Wednesday after dropping about 7% the day before. SK Hynix shed early gains to drop 5.7%. |
