U.S. President Donald Trump on Wednesday declared that a tentative ceasefire and memorandum of understanding with Iran is "over," abruptly shattering a fragile peace agreement just ahead of the annual NATO summit in Turkey, Reuters reported.

Shipping Attacks Trigger Retaliation

Speaking alongside NATO Secretary General Mark Rutte, Trump dismantled the diplomatic framework that had briefly halted military hostilities, stating flatly, "For me, I think it's over."

The collapse of the 60-day interim accord follows a rapid escalation of violence in the Strait of Hormuz, where three commercial vessels were recently targeted. Blaming Tehran for the attacks, Washington retaliated by launching a fresh wave of military strikes against Iranian targets and revoking a waiver that allowed the sale of Iranian oil. Tehran countered that the U.S. military action and economic penalties violated the fragile agreement, which had been intended to broker a broader peace.

Trump Slams Iranian Leadership

Trump expressed deep skepticism regarding future diplomatic engagement, labeling the ongoing negotiations a "waste of time." "I don't want to deal with them, but they're scum," Trump remarked, intensifying his rhetoric. "They can talk, but I think they're wasting their time." While a U.S. official noted that negotiators would continue working toward a final deal, formal talks remain suspended as Iran conducts a mass funeral for late Supreme Leader Ali Khamenei, who was assassinated in late February.

Oil Prices and Political Fallout

The sudden breakdown sent immediate shockwaves through global energy markets, causing oil prices to surge. WTI crude oil futures were trading higher in the early New York session by 6.25% to hover around $74.84 per barrel. Meanwhile, the ETF tracking this, United States Oil Fund LP (USO), rose by 3.97% in premarket on Wednesday. Similarly, Brent crude oil futures spiked by 6.28% to $78.82, and the ETF tracking it, United States Brent Oil Fund LP (BNO), gained by 4.22% in premarket on Wednesday.

U.S. stock futures declined on Wednesday, as the Dow Jones, Nasdaq 100, and S&P 500 indices fell, following Tuesday's lower close. The SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ), which track the S&P 500 and Nasdaq 100, respectively, were lower in premarket on Wednesday. The SPY was down 0.95% at $740.59, while the QQQ declined by 1.26% to $700.47.