Oil prices jump 6%, stocks tumble after Trump says Iran MoU is ‘over’

The interim peace accord between Iran and the US was already on thin ice after the exchange of strikes. Now, President Trump’s recent announcement is going to be the final nail in the coffin of the memorandum of understanding.

On Wednesday, while attending the NATO Summit in Ankara, Donald Trump spoke about the MoU signed with Iran in June, "It's a very interesting question to me. I think it's over.”

"I don't want to deal with them anymore. They're scum," he added.

These unexpected remarks have sent shockwaves across the global stock and energy markets. Front-month Brent crude futures jumped 6 percent to $78.63 per barrel, while West Texas Intermediate (WTI) climbed 6.2 percent to reach $74.85 per barrel.

Additionally, natural gas prices rose, with the benchmark Dutch TTF contract increasing by 4.8% to 49.04 euros per megawatt-hour.

The US stock index futures saw a sharp decline in the wake of Trump’s comments. Dow Jones Industrial Average futures plunged 705 points or 1.3 percent. Moreover, S&P 500 futures tumbled 1 percent and Nasdaq 100 futures also traded lower.

The European stock markets also slipped sharply along with Stoxx 600’s benchmark which dropped by 1.8 percent.

Almost every sector and major exchange ended in the red, with the oil and gas industry standing out as the sole exception to the broad downward trend.

Prior to Trump’s announcement, the fresh military strikes between the US and Iran also kept the energy markets on edge, raising the concerns of pushing the prices of oil which have been in a stable position since mid-June.