Oil Surges Past $76 as US Strikes Iran and Revokes Sanctions Waiver

Brent crude, the main international benchmark, rose more than 3 percent on Wednesday, reversing a slide that had pushed prices back to pre-war levels. Brent futures for September traded at $76.48 a barrel as of 06:30 GMT, the highest since June 23. The benchmark climbed as high as $78.50 a barrel in early Asian trade, a 5.85 percent gain on the day.

The market’s bet on a return to peace is unwinding. The US launched strikes on Iran and revoked its 60-day sanctions waiver on Iranian oil sales in response to attacks on three commercial vessels in the Strait of Hormuz. Asian stock markets were mixed, with steep losses in Tokyo and Seoul and gains in Taipei and Hong Kong. Talks between Washington and Tehran remain paused as Iran holds funeral ceremonies for Ayatollah Ali Khamenei, who was killed on the first day of the original US-Israeli strikes on Iran.

Three Tankers, Three Blames

US Central Command said on X that it had begun “launching a series of powerful strikes against Iran to impose heavy costs for targeting and attacking commercial shipping crewed by innocent civilians in an international waterway.” The strikes hit more than 80 targets, including air defence systems, coastal radar, Iranian missile launch sites, command centres, and 60 small boats used by Iran’s paramilitary Revolutionary Guard. The trigger was Tuesday’s attacks on three commercial vessels in the Strait of Hormuz. The US, Qatar, and Saudi Arabia all blamed Iran for the attacks.

Two of the struck tankers are named in regional statements. Al-Rekayyat, a Qatari vessel, was targeted as it transited near the strait, Qatar’s foreign ministry said. Saudi Arabia’s foreign ministry said Iran had targeted the Saudi tanker Wadyan as it crossed the waterway. Tehran has not directly claimed responsibility for the attacks.

Iranian foreign ministry spokesman Esmail Baghaei described Qatar’s accusations as “contrary to the principle of good neighbourliness.” He said commercial vessels using routes not coordinated with Iran or tampering with ship tracking face a “risk of collision” and disrupt Iran’s efforts to “facilitate safe transit” in the strait.

A Ceasefire Built on Vague Language

The 14-point memorandum of understanding signed on June 17 was meant to extend a ceasefire and end the conflict “on all fronts.” The deal reopened the Strait of Hormuz for commercial shipping after months of disruption. Less than three weeks later, the agreement has been broken on multiple fronts.

The deal left the central question of who controls the strait unresolved. Disagreement between the US and Iran over whether the Strait of Hormuz is an international waterway or partly Iran’s territorial waters was never fully resolved, according to Tony Sycamore, a market analyst at IG Australia. Sycamore said the MoU’s language was “deliberately vague” regarding control of the strait and traffic management. During the conflict Iran had already established the “Persian Gulf Strait Authority,” which it said would manage “safe passage permits” and could collect “service fees” from transiting vessels.

The MoU required Iran and Oman, which both border Hormuz, to hold talks “to define the future administration and maritime services” in the waterway with other Gulf states. Iran’s Fars news agency reported that under the deal the strait would ultimately be managed by Iran in coordination with Oman. The arrangement was meant to defer the central question, not resolve it.

Sycamore’s note to clients on Wednesday captured the open question. “It remains to be seen whether this morning’s US strikes bring a swift end to the latest escalation or Iran elects to continue flexing its leverage over the Strait with actions that fall short of triggering a broader conflict.” He added: “At the very least, it will keep markets on edge and does suggest crude oil prices have based for now.”

The Sanctions Waiver Is Revoked

The Treasury Department moved late on Tuesday, hours before the strikes were announced. The Office of Foreign Assets Control revoked the general license that had authorized the sale of Iranian oil, according to a statement on the department’s website. The license had been in place for less than three weeks, having been issued in late June as part of the broader deal. Iranian oil transactions will no longer be allowed after 12:01 a.m. EDT (04:01 GMT) on July 17, and the new order rescinds authorization for any new transactions, including purchases or loading, after Tuesday.

The original license had authorized Iranian oil sales through August 21. A US official told Axios the MOU in effect with Iran is entirely performance-based. The official framed the revocation as a consequence of Iran’s behavior in the strait.

Iran’s foreign ministry called the revocation a breach of the memorandum. It said the move proved the “bad faith, inconsistency, and unreliability” of the US government, language that pointed to a wider breakdown of the diplomatic track.

President Trump and the administration have repeatedly affirmed, the MOU in effect with Iran is entirely performance-based. Iran will only reap benefits if they exhibit good behavior. Iran’s actions in the strait were wholly unacceptable to the United States and will be met with consequences. Our negotiators continue to work in good faith toward a final deal.

How the Market Reacted

Brent crude, the international benchmark, rose 5.85 percent to $78.50 a barrel in early Asian trade on Wednesday, according to CNBC. US West Texas Intermediate futures climbed 5.69 percent to $74.45 per barrel. The 10-year US Treasury yield ticked up 5 basis points to 4.581 percent. Andrew Jackson, a strategist at Ortus Advisors, told CNBC the move raises the likelihood that the Federal Reserve will be forced to take a more hawkish stance with inflation “here to stay.”

The Al Jazeera snapshot had Brent at $76.48 a barrel as of 06:30 GMT, the highest since June 23. Traders had pushed oil back toward pre-war levels in recent sessions on bets the deal would hold. The surge unwound that bet in a single morning.

• Brent crude: $76.48 at 06:30 GMT (highest since June 23); up to $78.50 intraday per CNBC
• WTI: $74.45 per barrel, up 5.69 percent
• 10-year US Treasury yield: 4.581 percent, up 5 basis points
• Asia equities: Tokyo and Seoul lower; Taipei and Hong Kong higher

Tehran’s Warning and Its Retaliation

Iran has framed the US attacks as an American violation of the June 17 MoU, not as Iranian aggression. Iranian Deputy Foreign Minister Kazem Gharibabadi said Tehran would take “decisive actions” to safeguard its interests and security, describing the waiver revocation as a “blatant violation” of the memorandum. Iran’s foreign ministry said the US action proved the “bad faith, inconsistency, and unreliability” of the US government. The ministry warned Tehran “will take whatever measures it considers necessary to safeguard its national interests and national security.”

By Wednesday, Iran’s response had moved from words to military action. The Islamic Revolutionary Guard Corps said it had launched missiles and drones at 85 key US military facilities in Bahrain and Kuwait, including a US Navy headquarters and an air base in Kuwait. Iranian state media reported the first Iranian casualty of the US strikes: Guardsman Mohammadreza Khazini, killed by shrapnel from a projectile while confronting enemy drones.

The US strikes hit Qeshm Island, Bandar Abbas, and Sirik, according to Iranian state media, with shrapnel injuries on the ground. Iranian parliament speaker Mohammad Bagher Ghalibaf accused the US of breaching the MoU on multiple fronts, including the attacks in southern Iran and “violating Iranian adjustments in the Strait.” Kuwait lambasted the “repeated attacks” on its territory. The escalation also coincides with funeral ceremonies for Ayatollah Ali Khamenei, with rites in Iraq on Wednesday and the final burial set for Mashhad on Thursday.

The era of bullying and extortion is over. It leads nowhere. We don’t fold.

The Multi-Month Supply Story

The price spike is not the only thing traders are watching. Saul Kavonic, head of energy research at MST Financial, told Al Jazeera he expects oil prices to remain elevated as hazardous conditions persist in the strait. The release of emergency oil stockpiles is winding down, and there is no easy replacement supply.

Kavonic said “Iran fully intends to cement its control over the Strait of Hormuz in the coming weeks, which is unacceptable to the US, many Gulf states and global customers.” He added that the situation “could result in passage through the strait remaining below 50 percent of pre-war levels for many months, with periodic flare-ups in hostilities.” The new strikes are unlikely to end the standoff quickly. The Trump administration shows no sign of a diplomatic reset.

Trump told reporters at a NATO summit in Ankara on Wednesday that the ceasefire is over. “I don’t want to deal with them anymore,” he said, calling a peace deal a “waste of time dealing with” the Iranian side.

NATO chief Mark Rutte described the US strikes as “absolutely necessary,” arguing Iran was “basically violating the ceasefire.” Talks remain paused for the Khamenei funeral, and the Strait of Hormuz question is no closer to resolution. the regional pipeline race reshaping oil routes is the longer-arc response from Gulf states and Iraq, splitting oil exporters into haves and have-nots as the strait stays at risk.

A Pre-War Pricing Bet Unwinds

The market had been pricing in a return to peace. Traders had moved Brent back toward pre-war levels as the June 17 deal appeared to hold, with several earlier rounds of escalation de-escalated through talks. The new strikes reverse that assumption in a single session. The market has not yet fully repriced for a multi-quarter standoff. The deal that had pushed Brent below $80 is being unwound in real time, and inventories near the Cushing operational floor leave little cushion against another leg up.

Andrew Jackson, a strategist at Ortus Advisors, told CNBC the timing of the attacks complicates the picture. “It’s not in Iran’s best interest to settle on a deal with their leverage over Trump only increasing the closer we get to November,” he said. November’s US midterm elections raise the political cost of inflation for the Trump administration.

The ceasefire that was supposed to hold has lasted three weeks. The price of its failure is now showing up in Brent.