Oil prices surged more than 5% on Wednesday, with Brent crude briefly topping $80 a barrel, after the United States launched a new wave of strikes on Iranian military targets and President Donald Trump declared the interim ceasefire “over”. The US also revoked the general licence that had permitted Iranian crude sales, reimposing sanctions that had been lifted under the fragile truce. The combined military and economic offensive shattered the 60-day pause that had allowed a tentative resumption of tanker traffic through the Strait of Hormuz.

The Strait of Hormuz, through which roughly one-fifth of global oil supplies passed before the conflict, is again at the centre of the crisis. Iran threatened to close the waterway in response to the strikes, and shipowners have largely halted transits, with analysts in London noting that tanker traffic has “practically stopped”. The US Central Command said its strikes targeted air-defence systems, coastal surveillance assets, missile and drone storage sites, and naval infrastructure along Iran’s coastline, aiming to keep the strait open. Yet the escalation has reintroduced a sharp geopolitical risk premium, with traders in Singapore and European capitals warning that even if full-scale war is avoided, the ambiguity over the strait’s status will sustain price volatility for months.

Global markets absorbed the shock unevenly. European equity indices fell sharply, with Frankfurt’s DAX down 2.2% and Paris’s CAC 40 off 2.2%, while Wall Street’s Dow Jones Industrial Average lost 1.1%. Asian markets bore the brunt on Thursday, with Seoul’s Kospi plunging over 5% and Hong Kong’s Hang Seng down nearly 3%. Bond yields climbed as inflation expectations firmed, and traders priced a higher probability of a Federal Reserve rate increase in September. The dollar held broadly steady, but emerging-market currencies showed mixed reactions: the Brazilian real edged lower while the Malaysian ringgit strengthened slightly. From Tehran, state media reported that the Revolutionary Guard had struck US military sites in Bahrain and Kuwait in retaliation, and officials warned of an “immediate response” to further attacks.

The immediate focus turns to whether the violence escalates after 9 July, when the official mourning period for Iran’s former supreme leader concludes. Diplomats in Ankara, where Trump addressed the NATO summit, suggest that back-channel talks might persist, but the military momentum and public rhetoric have hardened positions on both sides. The next factual milestone is the resumption—or permanent collapse—of the negotiation framework, and any US decision on a naval blockade of Iranian ports, which Trump indicated could include Kharg Island, Iran’s main oil export terminal.