Oil prices jumped to $72.30 per barrel on Tuesday after the U.S. Treasury revoked a license authorizing Iranian crude sales, escalating tensions in a region where roughly a fifth of global oil and liquefied natural gas shipments pass through each day.
The revocation came hours after three commercial tankers were struck by unknown projectiles in and near the Strait of Hormuz, according to the British navy-affiliated agency UKMTO. A U.S. official said initial indications suggested Iran had fired at the vessels, and the Trump administration called the attacks “wholly unacceptable.”
Oil prices rose more than 5% following the announcement, according to Reuters. West Texas Intermediate crude climbed 2.6% to $72.3 a barrel, while Brent crude rose 2.7% to $76.1 a barrel, extending gains from earlier in the day.
Strikes and Sanctions Unwind a Fragile Peace Deal
The U.S. Treasury had authorized the Iranian oil sales through August 21 as part of a 60-day license issued in late June, a key aspect of a fragile memorandum of understanding between Washington and Tehran aimed at de-escalating the conflict. The revocation cuts that wind-down period to July 17, according to Reuters.
In retaliation for the tanker attacks, the U.S. military launched new strikes against Iranian targets early Wednesday, hitting air defense systems, radars, and over 60 small boats used by Iran’s paramilitary Revolutionary Guard, according to reporting on the operation. The strikes represent a dramatic escalation that threatens to unravel the diplomatic understanding reached just weeks earlier.
Bob McNally, president of Rapidan Energy Group, warned that the developments “signal that the ceasefire is not as solid and durable as the oil market has chosen to assume,” and added that “the oil market has some risk pricing to do,” according to Reuters. Negotiations between the two sides continue “in good faith” toward a final agreement, a U.S. official said, though the latest escalation has put the talks on shaky ground.
Why Oil Markets Are Sensitive to Strait Disruptions
The Strait of Hormuz, a narrow waterway between Iran and Oman, is one of the world’s most critical energy choke points. Before the broader Iran conflict began in February 2026, roughly a fifth of global oil and liquefied natural gas shipments passed through the strait each day. Any prolonged disruption could push up energy prices and increase pressure on consumers and governments already facing higher fuel costs, according to Reuters.
Oil exports remain a critical source of revenue for Iran, providing billions of dollars in hard currency that help fund government spending and support an economy weakened by years of U.S. sanctions. Despite restrictions, Tehran has managed to expand shipments in recent years, largely to China, making oil sales one of the country’s most important economic lifelines.
Sources
- Reuters — Confirmed U.S. revocation of Iranian oil sales license on July 7, oil prices up more than 5%, tanker strikes in Strait of Hormuz, license wind-down to July 17, and Bob McNally commentary
- HDFC Sky — WTI crude climbed 2.6% to $72.3 a barrel, Brent crude rose 2.7% to $76.1 a barrel
- UKMTO (British navy-affiliated agency) — Three tankers struck by projectiles in and near Strait of Hormuz
- CBS News — U.S. military launches retaliatory strikes on Iranian targets after tanker attacks
- PBS NewsHour — U.S. launches new strikes on Iran after attacks on tankers in Strait of Hormuz
