President Donald Trump said Thursday he would have “no hesitation” using military force to stop Iran from threatening US allies and ships, adding that “it’s possible I would do it right now.” Speaking hours after calling off diplomatic efforts with Tehran, Trump asserted that the US controls the Strait of Hormuz and that the Iranian regime is collapsing under 301% inflation, with its economy “gone” and its soldiers going unpaid.

The warning followed a Truth Social post earlier Thursday in which Trump declared the US no longer needed an agreement with Iran after Qatar relayed a message from Tehran over the prior 24 hours refusing to negotiate over its nuclear program. Asserting that Washington already holds “Hundreds of Billions of Dollars” in Iranian funds, Trump simultaneously pulled Vice President JD Vance off the diplomatic effort and directed him to focus his “complete and total attention” on alleged corruption and crime in Democratic-run cities and states, naming Minnesota, California, Illinois, New York and Maine.

Oil futures erased earlier losses and jumped more than $2 a barrel after Trump abandoned the talks, with Brent crude climbing up to 3% to $94.40 and West Texas Intermediate rising 2.85% to $87.70, while bond yields climbed on expectations that higher energy costs would prompt the Fed to accelerate interest rate hikes. The reversal came a day after the Wall Street Journal reported that Trump had authorized Vance to lead Iran negotiations, superseding special envoys Steve Witkoff and Jared Kushner, and that Vance was considering direct talks with Iranian Supreme National Security Council Secretary Mohsen Rezaei, who on Wednesday dismissed reports of a planned meeting as “lies.”