Trump says Iran deal ‘over’ as US, Tehran trade strikes amid Khamenei funeral

US President Donald Trump said on Wednesday (July 8) that the interim agreement with Iran was “over” but he would allow talks to continue. That raised concerns that the wider conflict in West Asia could resume — and oil prices shot up and stock markets went down.

“For me, I think it’s over,” Trump responded when asked about the status of ceasefire. He added that US representatives can continue negotiations but he cast doubt on the outcome. “They can talk, but I think they’re wasting their time,” he said.

US launches fresh strikes

The US launched strikes on Iran early Wednesday, hours after it revoked a license authorising the sale of Iranian oil in retaliation for what it said were Tehran’s attacks on ships in the Strait of Hormuz. Iran hit back with strikes on Bahrain and Kuwait.

Also read: Iran begins Ali Khamenei's funeral procession in Tehran as mourners call for revenge

The crossfire came during the days-long funeral for Iran’s Supreme Leader Ayatollah Ali Khamenei, who was killed February 28 on the first day of US-Israel strikes. The funeral, which ends Thursday, was supposed to be a period of lower tensions — though mourners have repeatedly called for the killings of Trump and Israeli Prime Minister Benjamin Netanyahu.

Funeral ceremonies were held in the Iraqi city of Najaf on Wednesday. Attending the services are Iranian President Masoud Pezeshkian and other Iranian as well as Iraqi officials, including Prime Minister Ali Falah al-Zaidi. There will be funeral prayers later at the Imam Hussein shrine in Karbala.

Uncertainty rules

Negotiations to reach a final deal had been due to start after Khamenei’s burial and focus on the toughest matters, including fully reopening the strait and rolling back Tehran’s disputed nuclear programme.

But the new attacks throw that into question, though neither country immediately signalled they’d walk away from the negotiating table.

Also read: ‘Will never forget this gesture’: Iran thanks India for solidarity at Khamenei funeral

“The era of bullying and extortion is over,” Iranian Parliament Speaker Mohammad Bagher Qalibaf wrote on X. “It leads nowhere. We don’t fold.”

US targets boats

The US military’s Central Command said American forces launched strikes “to impose heavy costs for targeting and attacking commercial shipping crewed by innocent civilians in an international waterway”.

It said it hit Iranian targets including air defence systems, radars and over 60 small boats used by Iran’s paramilitary Revolutionary Guard. Those boats have been key to threatening ships in the strait, through which a fifth of the world’s traded oil and natural gas passed before the war.

The US military remains “prepared to hold Iran accountable when the agreement is not adhered to or obeyed,” it added, saying this round of attacks had ended.

Iran targets US forces in Bahrain, Kuwait

Iranian state media reported explosions in several locations, including in Bandar Mahshahr, where a Guard member was killed. It also reported attacks on Bushehr, home to Iran’s nuclear power plant complex.

Also read: Trump says ‘one shot’ could eliminate Iran’s leadership during Khamenei funeral

On Wednesday morning, both Bahrain, home to the US Navy’s 5th Fleet, and Kuwait, home to US Army forces, sounded missile alerts. The Guard issued a statement acknowledging targeting US military installations in both countries.

Wednesday’s strikes came as Trump was in Turkey for a summit of the NATO military alliance.

US revokes license for sale of Iranian oil

Before the strikes, the US revoked a licence that authorized the sale of Iranian oil as part of the interim deal. That paused US sanctions and allowed Iran to conduct oil sales openly for US dollars for the first time in years. Iran long had been suspected of selling sanctioned crude at below-market prices to China.

The decision came after the strikes on shipping. One tanker was off the coast of Oman when it was hit and caught fire, the United Kingdom Maritime Trade Operations Centre said. Iranian state television said the tanker came under attack after ignoring warnings but did not directly claim the assault.

Tanker carrying Qatari natural gas hit

Majed al-Ansari, a spokesperson for the Qatari Foreign Ministry, said the tanker was carrying Qatari natural gas and called the strike an “unacceptable attack” on international navigation and global energy security. He said Qatar, which has been a key mediator alongside Pakistan in the talks, holds Iran “fully legally responsible.” The other two ships sustained some damage, but no one was injured, and both continued on their way, the UK agency said.

Also read: Iran expects 3,000 deaths during Khamenei’s funeral, keeps graves ready: Report

Iran and the United States agreed as part of the interim deal to allow ships to pass through the strait without paying charges for 60 days. But Tehran has insisted it must control the vessels’ routes and vowed to later charge fees for passage. That would upend decades of practice in the waterway. The ships attacked Tuesday all appeared to be using a route close to Oman’s shore, rather than one ordered by Tehran.

The US and many Gulf Arab states say they will not agree to Iran charging for passage through the strait.

(With agency inputs)