Oil prices spike whenever Iran tensions flare, and July 8 was no exception. Brent crude jumped 6% to $74.50 a barrel after President Donald Trump declared…
Oil prices spike whenever Iran tensions flare, and July 8 was no exception. Brent crude jumped 6% to $74.50 a barrel after President Donald Trump declared the ceasefire between the United States and Iran was over, just 18 days into what had been agreed as a 60 day truce.
Gasoline moved too, though less dramatically. The national average for a gallon of regular rose to $3.80 on Wednesday, according to AAA, up slightly from earlier in the week but still below the $4.16 seen last month. Gas prices typically lag oil prices by days or weeks, so any further increase in crude could take time to show up fully at the pump.
What Trump Said at the NATO Summit
Speaking to reporters at the NATO summit, Trump said American negotiators still wanted to pursue a peace deal, but he was personally done trying. "To me, I think it's over. I don't want to deal with them," he said, calling Iran's leadership "scum" and "sick people." The remarks came after a ceasefire that both sides agreed to on June 19, following a U.S. strike on Iran on June 26 in response to alleged Iranian attacks on ships in the Strait of Hormuz, a waterway that carries roughly 20% of the world's oil supply.
Why the Iran Ceasefire Collapse Is Pushing Oil Prices Higher
A second factor is adding fuel to the spike: the Treasury Department revoked a temporary license on July 7 that had allowed Iran to sell oil on the open market. Cutting off that supply route, even partially, tightens global inventories and gives traders another reason to bid crude higher. Together, Trump's comments and the Treasury move explain most of Wednesday's jump.
Ryan Sweet, chief global economist at Oxford Economics, wrote in a July 8 note that the bigger question is whether this is
