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Oil Prices Jump, Airspace Closures as US-Iran Ceasefire Crumbles

Oil prices have surged and aviation authorities have tightened airspace warnings after US President Donald Trump declared the US-Iran ceasefire “over.”

According to the BBC, Trump told reporters covering the NATO summit in Türkiye that he didn’t “want to deal with them anymore, they're scum.” An exchange of missile fire and drone attacks followed, with the US hitting key infrastructure in Iran, which retaliated by targeting American allies in the region and once again closing the Strait of Hormuz.

The European Union Aviation Safety Agency has told airlines to avoid airspace over Iran, Iraq and Lebanon until 31AUG, and said it’s monitoring the situation closely. The organization’s previous warning for the Middle East and Persian Gulf was set to expire today.

In the hours since Trump’s remarks, benchmark oil prices have risen by nearly 5.5%, leaving industry analysts wondering what the end of the short-lived ceasefire will mean for the price of jet fuel.

Jet fuel reached record highs following US and Israeli attacks on Iran earlier this year. Many airlines responded by cutting routes and capacity, increasing fares, and adding fuel surcharges. 

In April, the possibility of jet fuel shortages in Europe further injured traveller confidence, although the predicted shortages never materialized and summer travel demand remains strong.

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