Oil Spikes as US Strikes Iran, Shredding Fragile Mideast Ceasefire

Global oil prices surged over 5% today after the United States launched a series of 'powerful strikes' against Iran, retaliating for recent Iranian attacks on three commercial vessels in the critical Strait of Hormuz. This sudden escalation follows President Donald Trump's declaration that the interim peace deal with Iran, signed just last month, is now 'over', shattering a fragile de-escalation that had brought some stability to Middle Eastern shipping. The White House's decision to revoke a waiver allowing Iranian oil sales further tightened the screws on Tehran, compounding fears of major supply disruptions from the Persian Gulf, a vital artery for global energy. This breakdown of the June Memorandum of Understanding comes after indirect talks aimed at a permanent agreement ended last week without progress, and against the backdrop of ongoing funeral rites for Iran Supreme Leader Ayatollah Ali Khamenei, whose death in February had fueled calls for revenge. The situation also contradicts recent moves by OPEC+ to increase oil production, predicated on a stable Strait of Hormuz. With Iran military warning that any site aiding US attacks would become a 'legitimate target' and reports of retaliatory strikes hitting Bahrain and Kuwait, the region is bracing for further instability. Shipping authorities have already raised the threat level in the Strait of Hormuz to 'severe,' prompting several tankers to turn back or switch off tracking signals, signaling prolonged uncertainty for global energy markets and a potential squeeze on the global economy as inflation concerns re-emerge.