Oil prices jump to more than $78 a barrel as Trump says ceasefire with Iran is 'over'

Oil prices surged nearly 6% after US President Donald Trump said on Wednesday that the interim agreement with Iran is “over,” though he will allow talks to continue. His remarks came after the US carried out strikes on Iran in response to attacks on three ships in the Strait of Hormuz.

Brent crude climbed 5.6% to trade above $78 a barrel, while US benchmark crude rose 5.8% to $74.55 a barrel. The sharp rally in oil prices may have a ripple effect across global markets, especially for import-dependent nations.

“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 told AP on the sidelines of the two-day NATO summit in Ankara, Turkey.

Iran tensions reignite oil market fears

Crude prices had dropped recently from spikes well above $100 a barrel to around the levels they were at before the US and Israel war with Iran began in late February this year.

As part of their interim deal to end the war, Iran and the United States agreed to allow ships to pass through the strait without paying charges for 60 days. However, Tehran has insisted it must control the vessels’ routes and vowed to later charge fees for passage, AP reported.

Such a move 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 renewed disruption in oil markets has also come amid growing concerns that the rally in artificial intelligence-related stocks has driven valuations beyond the productivity gains and profits that are likely to result from heavy investments in semiconductor manufacturing and data centres, the news report stated.

“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.

Global markets update

In stock trading, Germany's DAX shed 1.1% to 25,191.69 and the CAC 40 in Paris gave up 0.9% to 8,358.67. Britain's FTSE 100 slid 0.8% to 10,579.09.

The future for the S&P 500 edged 0.1% lower and that for the Dow Jones Industrial Average was down 0.4%.

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 rose and then fell 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.

Taiwan's Taiex rose 0.6%.

In Hong Kong, the Hang Seng rose 3% to 24,193.56. Hong Kong traded shares of Chinese AI model startup Zhipu, known also as Z.ai and traded as Knowledge Atlas Technology, rose nearly 14% on Wednesday.

A six-month lock up period for “cornerstone” investors after its $558 million trading debut in Hong Kong in early January expires this week. State-owned China National Radio reported late Tuesday that nearly 70% of Zhipu’s cornerstone investors are committed to stay on, despite previous worries that the lock up period expiration could trigger a sell-off of shares. Zhipu’s share price has risen more than 1,300% since its January trading debut in Hong Kong.

The Shanghai Composite index declined 0.5% to 3,970.88.

Elsewhere in Asia, Australia's S&P/ASX 200 shed 0.2% to 8,785.10, while India's Sensex lost 0.7%.

On Tuesday, the roller-coaster ride for AI stocks whipped back down, dragging Wall Street lower.

The S&P 500 fell 0.4%, though the majority of stocks within the index rose.

The drops for stocks in the artificial-intelligence industry dragged the Nasdaq composite 1.2% lower, while the Dow Jones Industrial Average dropped 0.2%.

Advanced Micro Devices sank 6.5% and Intel shed 9.7%. Micron Technology lost 4.7%.

SpaceX, which owns the xAI business, fell 6.8% in its first day of trading after it was included in the Nasdaq 100 index.

In other trading early Wednesday, the U.S. dollar rose to 162.26 Japanese yen from 162.11 yen. The euro climbed to $1.1426 from $1.1414.