Trump declares Iran ceasefire ‘OVER’ after strikes in Strait of Hormuz

President Donald Trump said the US ceasefire with Iran is “OVER” after another round of strikes tied to attacks in the Strait of Hormuz, though he added that negotiators will keep talking. Markets reacted quickly, with oil pushing higher and shipping activity through the strait slowing.

What Trump actually said

Trump said on Friday that the U.S. agreed to continue talks with Iran, but it will not adhere to the ceasefire anymore, following ongoing de-escalation efforts by regional mediators over the last 48 hours to prevent the total collapse of the U.S.-Iran deal.

On Truth Social, Trump wrote that Iran has asked the US to continue “talks,” and the US agreed, but told Tehran in no uncertain terms that the Cease Fire is OVER.

A source with knowledge said another round of negotiations between the U.S. and Iran is expected next week, possibly in Switzerland.

How it fell apart

Trump’s comments came after the U.S. and Iran traded attacks again overnight Wednesday, the second such escalation since the two sides signed an interim deal in mid-June. The strikes followed Tuesday’s attacks from Iran on three commercial ships in the Strait of Hormuz. The U.S. said it carried out strikes on Iranian targets in what it said was retaliation for the previous Iranian aggression. The Iranian Revolutionary Guard said it responded by launching missiles and drones against Kuwait and Bahrain, two Arab Gulf countries that host U.S. military bases.

Trump also floated the idea of reinstituting the naval blockade on Iran.

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Market reaction: oil and shipping

Trump’s declaration in Ankara that the understanding is moot has already impacted markets, with oil prices starting to climb again.

Oil prices eased on Friday but remained on track for weekly gains of 5% after the flare-up. Daily tanker traffic through the Strait of Hormuz appeared to have slowed on Friday, after the series of attacks stoked concerns about the recovery of global oil supplies and shipping.

The Strait of Hormuz problem

The reason the ceasefire crumbled in recent days was that Iran kept striking vessels in the area. The administration has argued the blockade gave the US significant leverage by applying major pressure on Iran’s economy. If Tehran isn’t abiding by its promises to fully reopen the strait, one would think the US would want to reinstitute the blockade it had used as a countermeasure.

The war has proven Iran’s ability to inflict major damage on the world economy by threatening vessels that move through the strait. That leverage is a huge problem for the US and its Gulf allies — not just in this war but for the foreseeable future in the Middle East.

Options market and stocks to watch

Traders should watch how energy, defense, and shipping names react as the ceasefire narrative wobbles and oil holds a risk premium.

• XOM and CVX: Watch for continued bid if Brent stays elevated on Strait of Hormuz risk.
• USO: Watch as a direct crude proxy while tanker traffic through the strait slows.
• LMT and RTX: Watch defense primes on any renewed US strikes or blockade talk, particularly with Patriot licensing chatter in the mix.
• SPY: Watch broad risk sentiment if headlines swing between “over” and “talks continue.”

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