2026.06.1714:02:04UTC+00Oil Rebounds as Trump Casts Doubt on Iran Ceasefire

Crude oil climbed more than 1.5% to above $77 per barrel on Wednesday after US President Donald Trump warned that bombing of Iran could resume if Tehran failed to “behave,” injecting fresh uncertainty into prospects for a ceasefire agreement. Trump emphasized that the memorandum of understanding (MoU) with Iran was not final and that military action remained on the table.

The US–Iran MoU, which extends a fragile ceasefire by 60 days, could create space for negotiations toward a lasting truce and support efforts to rebuild severely depleted inventories. However, industry officials cautioned that a full recovery in Iran’s production and refining capacity could take weeks, months or even years, constraining the pace of any supply rebound.

Despite the day’s gains, oil prices remained near three-month lows, as the International Energy Agency (IEA) warned of an impending supply surplus. In its first outlook for 2027, the IEA projected that global oil supply could increase by 8 million barrels per day, while demand is expected to rise by only 2 million barrels per day, pointing to a significant oversupply in the market.