The 60-day ceasefire between the United States and Iran is dead, and so, for the foreseeable future, is the pretense that the Middle East can be managed through agreements rather than force. What began as a fragile diplomatic pause on June 17 has now given way to two consecutive nights of strikes between the two powers 8, with the US hitting over 90 targets along the Iranian coastline and Iran retaliating against American military installations in Kuwait, Bahrain, and Qatar 27. President Trump’s declaration that the ceasefire is “over” was not a diplomatic assessment but a tactical signal: the era of restraint has ended, and the era of escalation has begun 11.
The immediate trigger was Iran’s attack on three merchant ships in the Strait of Hormuz, which Washington rightly viewed as a violation of the truce 3. But the deeper logic is structural. The Strait of Hormuz is the world’s most critical energy chokepoint, and the ceasefire never resolved the underlying contest for control over it. Oil prices surged 5-7% on the news, with Brent crude briefly touching $80 before settling near $78 1. For markets, the message is clear: the risk premium on Middle Eastern oil is now permanent, not temporary.
Yet the crisis is not confined to the Persian Gulf. Russia’s decision to ban diesel exports, driven by a fuel crisis triggered by Ukrainian drone strikes on its refineries, adds a second layer of energy disruption 5. The IMF’s revised 2026 global growth forecast of 3.0%, down from its April projection, reflects the compounding effect of war and uncertainty 9. The world is not simply watching a regional conflict; it is absorbing the economic consequences of a multi-front energy war.