ATFX: Trump says the memorandum of understanding has ended, WTI surges to $75

ATFX: At 16:16 Beijing time on July 8, US President Donald Trump stated at the NATO summit: "For me, I think this matter (the US-Iran understanding memorandum) is over. In my view, it's just a waste of time." Iran responded: We will not yield; reiterating that under no circumstances will it allow US interference in the management of the Strait of Hormuz.

As early as July 7, Trump had publicly stated that he approved the strike plan against Iran (official statements indicated the strike had been carried out). The market is concerned about renewed conflict between the US and Iran, and the Strait of Hormuz may face the risk of closure again. On the same day, the US announced the revocation of the exemption for Iranian oil sales. This exemption plan had just taken effect on June 17, lasting less than a month.

Figure 1, WTI Minute Chart - ATFX

As shown in the figure above, at 16:16, after Trump said "it's over," WTI rose rapidly, with the quote surging from $71.81 to $73.24 within two minutes, and reaching $74.57 after 26 minutes. The day's high was $75.70, breaking through the key price of $75. From a market perspective, expectations have shifted from the Strait of Hormuz gradually reopening to the resumption of hostilities between the US and Iran, which would lead to the Strait of Hormuz closing again.

WTI is in an event-driven trend, with the key point being the prediction of US-Iran relations. Based on past performance, Trump often changes his views and strategies. Whether the current situation where "it's over" can continue remains highly uncertain. Israel's role in this conflict is still unclear, but it had already expressed dissatisfaction with the writing when the US-Iran understanding memorandum was signed on June 17.

According to official news, from the evening of July 8 to the early morning of July 9, Iran has already carried out counterattacks against US interests in Kuwait and Bahrain. If both sides continue the current relatively restrained strikes, market risk aversion may quickly recede, and US crude oil prices may also struggle to maintain a mid-term upward trend. If the situation escalates further, especially if Israel gets involved, market risk aversion may heat up again.

ATFX Risk Warning, Disclaimer, Special Statement: The market carries risks, and investment requires caution. The above content represents only the analyst's personal views and does not constitute any operational advice. Do not treat this report as the sole reference. The analyst's views may change over different periods, and updates will not be notified separately.