Oil Prices Jump on Renewed US Iran Hostilities After Trump Ceasefire Comments

Oil prices jump on renewed US Iran hostilities today, with the United States Oil Fund (AMEX:USO) rising 3.47% to $112.21 as traders react to the latest breakdown in diplomacy between Washington and Tehran. The move reflects growing fear that a fragile ceasefire reached in mid June is collapsing.

In Brief

• USO climbed 3.47% to $112.21, still well below its 52 week high of $154.08.
• President Trump said he believes the ceasefire deal with Iran is over, though he stopped short of declaring the conflict resumed.
• The US revoked a waiver that had allowed Iran to sell oil, following Iranian strikes on ships near the Strait of Hormuz.
• Brent and WTI benchmarks both surged roughly 6% in European trading on the news.
• The RSI reading of 43.76 suggests oil remains in neutral territory despite the sharp daily gain.

Why Oil Prices Jump on Renewed US Iran Hostilities

The spike traces directly to comments from President Trump, who told reporters he now considers the ceasefire agreement with Iran effectively finished. That statement landed after a fresh round of strikes between the two sides and came just after Washington pulled a waiver that had permitted Tehran to export crude. The waiver's removal followed Iranian attacks on commercial vessels near the Strait of Hormuz, one of the world's busiest chokepoints for oil shipments.

Trump did not say the United States plans to reenter the conflict militarily, and he left room for talks to resume if both sides remain willing. That ambiguity has not calmed markets. Traders are pricing in the risk that shipping through the Strait becomes less reliable, and every fresh incident makes the region's supply routes look shakier than the last recovery suggested.

Shipping Risk and the Forward Curve

Michelle Brouhard, head of policy and geopolitical risk at Kpler, noted that repeated attacks on shipping erode confidence that the Strait will stay open reliably. She warned that if reopenings keep looking temporary, freight rates and insurance costs will stay elevated, discouraging vessels from entering the Gulf at all.

That anxiety shows up in the oil futures curve itself. The market has moved into backwardation, meaning near term contracts now trade at a premium to longer dated ones. That pattern typically signals traders want barrels in hand now, a sign of real worry about near term supply rather than simple speculation.

What the Price Action Signals Next

USO's 3.47% daily gain, while sharp, still leaves the fund roughly a third below its 52 week high, underscoring how much ground oil has lost since prices peaked amid earlier Middle East tensions. An RSI near 44 shows the fund is not yet overbought even after the jump, leaving room for further gains if hostilities escalate or waivers stay revoked. Much now depends on whether Washington and Tehran return to the table or whether shipping through the Strait of Hormuz suffers another disruption.