Just a few weeks ago, the United States and Iran had agreed to a ceasefire. A truce meant to bring both sides to the negotiating table in search of a solution. Then, almost overnight, the United States struck Iran again. Trump declared that the ceasefire was "over." And oil prices surged.
WHAT HAPPENED OVERNIGHT
During the night, the United States launched a major strike against Iran. And when we say major, we mean major. Nearly 40 fighter jets, including F-35s, F-15s, F-16s, and F/A-18s, along with drones, carried out precision strikes.
How many targets? More than 80. Yes, you read that right. Eighty targets in a single night. Air defense systems, command and control networks, coastal radar installations, anti-ship missile sites. According to the U.S. military, more than 60 small boats belonging to Iran's Revolutionary Guard were also hit.
"So why all of this?" you might be wondering.
The immediate trigger was an attack on three commercial vessels transiting the Strait of Hormuz. The United States blamed Iran and said the strikes were intended to "impose a heavy cost" on anyone targeting civilian merchant ships.
As if that were not enough, the U.S. Treasury also revoked the waiver that had allowed Iran to sell its oil on international markets. Many viewed that waiver as the biggest concession Washington had made under the original agreement.
And this is where things become even more interesting.
Speaking from the NATO summit in Ankara, Trump dropped another bombshell, this time with his words.
"I think it's over," he said about the ceasefire. "I don't want to deal with them anymore. As far as I'm concerned, it's over." He added that talking to the Iranian side was "a waste of time."
But he did not stop there. He warned that the United States would "very likely" strike Iran again "hard, tonight."
Defense Secretary Pete Hegseth echoed the message, saying, "Tonight, if necessary, on your order, we will strike even deeper." He also spoke about reinstating a naval blockade, "and it will be a blockade only against Iran," while raising the possibility of targeting critical infrastructure, including desalination plants and energy facilities.
How did Iran respond?
It vowed an "immediate response." Iranian officials declared that the attacks had rendered the agreement "null and void" and warned that they could completely shut down the Strait of Hormuz.
There is, however, one major catch.
Just hours later, Trump changed his tone, saying, "I don't think the war will start again," while adding that he would not prevent negotiators from continuing their talks. So on one hand, the ceasefire was "over." On the other, he suggested the issue could be resolved quickly. You can see why investors were left scratching their heads.
OIL CAUGHT FIRE
Now let's move to the part that matters most to investors: oil.
As soon as the threats escalated, oil prices soared.
Brent crude, the global benchmark, jumped more than 5.7% to around $78 per barrel. U.S. benchmark WTI climbed nearly 5%, reaching roughly $73 to $74 per barrel. It marked the second consecutive day of gains.
"So why is oil rising so sharply?" you might ask.
The answer is simple: fear.
A massive share of the world's energy supply passes through the Strait of Hormuz. Every time there is talk of disruptions or a possible closure, markets immediately price in the risk. The Joint Maritime Information Center even raised its shipping threat level to "severe."
But there is another important detail.
Oil prices pulled back from their highs after Trump said he did not expect a full-scale war.
"It'll go up a little, and it'll end very quickly," he said. He also spoke about an "oil glut," arguing that global supply remained abundant as tankers resumed moving through the Strait.
In short?
One statement sends oil prices soaring. The next sends them lower. All within the same trading session.
And all of this is happening while the global economy is already struggling with high energy costs and growing fears that another wave of inflation could be on the horizon.
