Oil prices spiked on July 8 to their highest levels in weeks after President Donald Trump said the ceasefire between the United States and Iran was “over,” renewing concerns that U.S. consumers could face higher gas prices just as they had begun to expect relief.
Brent crude oil, the global benchmark, jumped 6% to $74.50 per barrel. While gas prices often lag oil prices, they also ticked slightly higher on Wednesday. The national average for a gallon of regular gasoline rose to $3.80, according to AAA. It’s up from $3.85 last week, but still down from $4.16 last month.
The two countries agreed to a 60-day ceasefire on June 19, though Trump said it was over after just 18 days. Within that window, the United States struck Iran on June 26 responding to what it said were Iranian attacks on ships in the Strait of Hormuz, the waterway responsible for carrying about 20% of the global oil supply. At the NATO summit, Trump said U.S. negotiators wanted to continue attempts to broker a peace deal, but he added that as far as he was concerned, it’s over.
“To me, I think it’s over. I don’t want to deal with them,” Trump said. “They’re scum. They’re sick people. They’re led by sick people, and they’re vicious, violent people.”
The jump in oil prices also appears to be a response to the Treasury Department’s July 7 revocation of a U.S. temporary license allowing Iran to sell oil on the open market – a move that could further constrain the supply of oil and lead to higher prices at the pump.
Will Gas Get More Expensive Again?
Gas prices have surged 27% and squeezed Americans’ budgets since the start of the Iran war on Feb. 28, but they were falling in recent weeks after a memorandum of understanding between the two nations.
While the ceasefire was always fragile and some flare-ups were inevitable, Oxford Economics’ chief global economist Ryan Sweet said in a July 8 note, “the question is whether this represents a bump in the road or whether we’re emerging from the eye of the storm.” It may be too early to tell.
“President Trump said US negotiators would continue talks with Iran, suggesting the truce hasn’t been irrevocably broken,” Sweet said, adding that if the peace deal breaks, “it won’t just raise oil prices; it would also increase pressure on AI supply chains in Asia, force central banks to be hawkish, tighten financial conditions, and could shift the outcome of the US midterms. The cascade runs fast.”
He added that while it’s unclear exactly how the situation will unfold, the state of negotiations between the two countries, oil and natural gas inventories, and the number of ships passing through the Strait of Hormuz will be telling indicators.
Patrick De Haan, head of petroleum analysis at GasBuddy, said in an X post July 8 that the ceasefire’s end put upward pressure on oil prices, adding it may push the national average toward $4 per gallon in the coming days.
“Watch for potential price increases soon,” he said.
This is a developing story and will be updated to add new information.
Reporting by Rachel Barber, USA TODAY / USA TODAY. USA TODAY Network via Reuters Connect.