Trump ends Iran ceasefire, oil jumps 5% and bitcoin slides below $62K

The collapse of the US-Iran ceasefire sent crude prices surging and risk assets tumbling as Washington and Tehran exchanged military strikes for a second time in 10 days.

President Donald Trump declared the ceasefire with Iran "over" Wednesday, sending Brent crude above $78 a barrel and bitcoin below $62,000 as the fragile Islamabad agreement collapsed into a fresh exchange of military strikes.

"The strikes were absolutely necessary because Iran was violating the ceasefire," NATO Secretary General Mark Rutte told reporters in Ankara, sitting alongside Trump at the summit of the 32-member alliance. "When you have a ceasefire and Iran is basically violating the ceasefire, I think it is totally crucial that the US forcefully react."

The US military struck more than 80 Iranian targets, including air defense systems, coastal radar sites and anti-ship missile capabilities, after three commercial vessels were attacked in the Strait of Hormuz, according to Central Command. A US official described the operation as four to five times larger in scope than the strikes carried out 10 days earlier. More than 60 Islamic Revolutionary Guard Corps small boats were destroyed to reduce Iran's ability to target commercial shipping. Iranian state media reported explosions in Bandar Abbas, Sirik Port, Qeshm Island and Kharg Island, the terminal through which 90% of Iran's crude exports transit.

Iran retaliated by launching missiles and drones at the US Fifth Fleet headquarters in Bahrain and Ali Al-Salem Air Base in Kuwait, claiming 85 sites were hit. Bahrain activated air defenses four times, with officials saying projectiles were intercepted over the country's airspace. Kuwait confirmed it was responding to hostile missile and drone attacks. A member of the IRGC Navy was killed during a confrontation with US drones in the southern port city of Bandar Mahshahr, according to Iran's Tasnim news agency.

Brent crude rose 5.3% to $78.09 a barrel, while West Texas Intermediate gained 5.4% to $74.23, extending gains from the previous session. Bitcoin slid below $62,000, and the Stoxx Europe 600 fell 1.6% as investors rotated out of risk assets. The US dollar strengthened and government bond yields moved higher as markets priced in renewed inflationary pressures from higher energy costs.

The Strait of Hormuz handles about 21% of global oil trade, and the collapse of the June 19 accord threatens to reignite a broader conflict that could disrupt energy supplies and stoke inflation. The Islamabad MoU had established a framework under which the US eased its naval blockade and allowed Iranian oil sales in exchange for Tehran guaranteeing safe passage for civilian vessels. Iran's Deputy Foreign Minister Kazem Gharibabadi accused Washington of violating Articles 1, 2 and 10 of the agreement by revoking oil waivers and launching strikes. The last time the US and Iran traded direct strikes in April, oil prices spiked 8% in a single session before settling 4% higher over the following week, while the S&P 500 fell 2.3% in the same period.

Trump called Iranian leaders "scum" and "evil people," saying "it's a waste of time dealing with them." He said the US would continue to respond to any future attacks: "Every time you hit, we hit." Iran's Parliament Speaker Mohammad Bagher Qalibaf responded on social media: "The era of bullying and extortion is over. It leads nowhere. We don't fold."

The EU Aviation Safety Agency instructed airlines to avoid Iranian and Iraqi airspace through Aug. 31, while Iran warned any country supporting US operations would be considered a legitimate target. US Defense Secretary Pete Hegseth canceled a planned visit to Israel as the crisis escalated. Oil markets now face the prospect of sustained disruption in the world's most important energy chokepoint, with the risk premium embedded in crude options likely to widen further.

This article is for informational purposes only and does not constitute investment advice.