Oil prices jumped more than 5 percent on Tuesday after the United States revoked its waiver on Iranian oil sanctions. This move came in response to strikes on three commercial vessels near the Strait of Hormuz, a critical chokepoint for global oil shipments.

International Brent crude oil surged nearly 5.5 percent, surpassing $75 per barrel by Tuesday evening.

A U.S. official told The Hill that the memorandum of understanding (MOU) aimed at pausing hostilities between the U.S. and Iran is "entirely performance-based." The official added, “Iran will only reap benefits if they exhibit good behavior,” and described Iran’s actions in the Strait as “wholly unacceptable to the United States and will be met with consequences.”

The Treasury Department issued a new directive requiring that transactions previously authorized under the sanctions waiver be wound down by July 17. The waiver had allowed sales of Iranian oil through August.

Iran’s Deputy Foreign Minister Kazem Gharibabadi condemned the revocation, stating it violated the MOU. He accused the U.S. of repeatedly breaching the agreement, citing "the actions of the Zionist regime in Lebanon and threatening statements against Iran," referring to Israel’s military presence in Lebanon.

Tensions escalated further as Central Command (Centcom) prepared to launch retaliatory attacks against Iran. Meanwhile, Maritime Trade Operations, affiliated with the British Royal Navy, reported that a commercial tanker caught fire on Monday after being struck by a projectile.

These developments have contributed to heightened geopolitical risks affecting oil markets.

Sources