Trump Declares Iran Interim Accord 'Over' as Strikes Loom and Oil Jumps 7%

Standing in Ankara before a NATO summit, President Donald Trump was asked whether the interim agreement with Iran was finished. He answered that it was a very interesting question, then said he thought it was over. "I don't want to deal with them," he told reporters, adding that dealing with Iran was a waste of time. He said he would let his negotiators keep talking if they wished, but that he did not see it going anywhere.

The remarks came on a day of escalation in the Gulf. Iran said it had attacked U.S. military sites in Bahrain and Kuwait, after American forces struck Iranian targets in response to attacks on tankers in the Strait of Hormuz. The Revolutionary Guards said they also shot down a U.S. MQ-9 drone that they said tried to interfere with the operation. Bahrain's army later said it had thwarted the Iranian attacks.

The backdrop is a war that began on February 28 with U.S.-Israeli airstrikes on Iran. A memorandum of understanding signed on June 17 had produced a shaky ceasefire and some hope of a permanent settlement. Trump said he did not expect a return to full-fledged war, but he doubted any deal would hold, calling the Iranians "very dishonourable people." Whether talks on a permanent agreement would continue was not immediately clear.

The U.S. response to the tanker attacks had been both military and financial. U.S. Central Command said more than 60 small Revolutionary Guard boats were among the targets hit, in an operation meant to impose a heavy cost for strikes on shipping in violation of the ceasefire. Trump said 28 boats were knocked out the previous night and that more would probably follow. He confirmed an attack on Kharg Island, Iran's main oil hub, and repeated a warning that U.S. forces could take it over: "They may hit it again tonight." A U.S. official said the strikes hit air defence systems, coastal surveillance, surface-to-air missiles, anti-ship cruise missiles and drone launch sites. Iranian media reported explosions on Kharg and Qeshm islands and in the port cities of Sirik and Bandar Abbas.

Iranian state media said eight Iranian service personnel were killed in strikes on southern Iran. No civilian deaths were reported. Iran's top joint military command called the strikes a "blatant act of aggression."

On Tuesday the U.S. Treasury had revoked a general licence that allowed the sale of Iranian crude, petrochemicals and petroleum products through August 21, a licence issued under the interim agreement. Iran was given until July 17 to wind down transactions. Foreign Ministry spokesperson Esmaeil Baghaei said the U.S. actions violated the memorandum, specifically a clause stressing Iran's responsibility in determining arrangements for safe passage through Hormuz.

Markets reacted quickly. Brent crude jumped 7% to $79.07 a barrel, its biggest one-day gain since late May. That is well below the peaks above $120 seen at the height of the fighting, but months of conflict have drawn down global oil inventories, and the jump added inflation risk to a bond market that tumbled. Wall Street's main indexes fell. Shipping data showed at least four oil and gas tankers turned back rather than transit the strait.

Iran's next move was unclear, with no comment from the Revolutionary Guard, which is close to Supreme Leader Ayatollah Mojtaba Khamenei and widely believed to be shaping policy. Deputy Foreign Minister Kazem Gharibabadi said Iran must speak to Trump in the language of force. Press TV cited an informed source saying Iran would close the strait if attacked again. A parliamentary security spokesperson listed options including leaving the Non-Proliferation Treaty, changing nuclear doctrine, and closing the Bab-el-Mandeb Strait at the mouth of the Red Sea.

A source familiar with the Ankara talks said Trump did not repeat his comment about the deal at the NATO leaders' meeting. Before meeting Ukrainian President Volodymyr Zelenskiy, though, he warned: "We're going to hit them hard tonight." Later he said anything that happened would be over quickly. What to watch now is whether Iran closes either strait and whether the July 17 wind-down deadline holds.