LONDON: Oil prices briefly soared back above US$80 per barrel while stock markets slid Wednesday (Jul 8) after US President Donald Trump said the ceasefire with Iran was over, following renewed strikes in the Middle East.

The latest bout of fighting was sparked by Iranian attacks on ships in the vital Strait of Hormuz shipping route, through which a fifth of the world's oil transited before the war. 

Trump said at a NATO summit in Türkiye the ceasefire was "over", although he left the door open to more talks.

The markets responded, with oil shooting back up again having in recent days come back down towards pre-war levels

International benchmark Brent North Sea crude jumped 8 per cent to US$80.12 per barrel around 3:20pm GMT, (11:20pm, Singapore time) before giving up some of those gains.

Meanwhile, the benchmark US oil contract, WTI for August delivery, gained 7.7 per cent to US$75.83 per barrel.

The potential reclosure of the Strait of Hormuz led to a sea of red on equity trading screens in markets across the world.

"The looming resumption of war between the US and Iran, or at least a fresh blockade of the latter, has driven a wave of selling in European markets that are heavily exposed to higher energy costs," said Chris Beauchamp, chief market analyst at online trading and investing platform IG.

Paris and Frankfurt both ended the day down more than two per cent and London dropped 1.6 per cent.

On Wall Street, the Dow was down 1.6 per cent in late morning trading, with both the the broad-based S&P 500 and the tech-heavy Nasdaq Composite down one percent as Trump's comments "triggered a sell-off" in markets, said Sam Stovall from CFRA.

"Geopolitical risks are rising" for markets, noted Kathleen Brooks, research director at trading group XTB. 

Fawad Razaqzada, market analyst with Forex.com, was even blunter.

"After a long and eventful first half of the year dominated by the US-Israel war on Iran and Trump’s constant flip-flopping, the last thing investors, and frankly anyone else, needed with the summer holidays approaching was a return of the same geopolitical environment," he said.

"Unfortunately, it looks like we could be heading back to that."

The United States launched extensive strikes on Iran this week following attacks on ships in the strait, triggering a wave of reprisals against American bases in the Gulf.

Washington also revoked a temporary sanctions waiver for Iranian oil.

Equities in Asia also suffered, with the geopolitical tensions coming on top of a retreat from the tech sector on concerns over the eye-watering sums being invested in AI.

Seoul's Kospi - which has been Asia's poster child for the tech rally - sank more than five percent and has lost more than 20 per cent since hitting a record high last month.

Samsung took another hit following a rout Tuesday that came despite the firm forecasting a roughly 19-fold jump in second-quarter operating profit from a year earlier on the back of strong AI chip demand. 

The company and rival SK hynix both tumbled around six per cent. 

"Investors have been spooked in recent weeks by fears of excessive spending in the AI world and rich valuations in parts of the tech space, causing widespread profit-taking," said Dan Coatsworth, head of markets at AJ Bell.

The dollar made some gains against its peers as the prospect of another hit to Middle East oil supplies fuelled concerns that inflation could remain elevated for longer than feared, putting pressure on the Federal Reserve to hike interest rates.