Oil prices extended gains on Wednesday to hit its highest in nearly two-weeks after drone attacks on tankers in the Strait of Hormuz prompted US retaliatory strikes and an immediate revocation of waivers authorizing Iranian crude sales.
Front-month Murban crude futures advanced more than 4% to $71.78 per barrel, while Brent futures climbed 3.2% to $76.55/bbl.
"The renewed attacks have raised the prospect of a complete collapse of the interim peace deal and a subsequent stalling of the recovery in oil supplies from the Persian Gulf," ANZ analysts said.
The UK Maritime Trade Operations confirmed that two separate commercial tankers transiting the vital choke point sustained minor structural damage after being struck by uncrewed aerial vehicles.
In immediate response, the US Central Command launched retaliatory military strikes against regional targets.
Simultaneously, the US Treasury Department's Office of Foreign Assets Control revoked the sanctions waiver that had previously authorized the sale of Iranian-origin oil.
Under the newly issued directive, all fresh transactions for Iranian oil are prohibited. Parties who entered contracts under the prior framework have been handed a tight timeline to wind down existing obligations.
"As President Trump and the administration have repeatedly affirmed, the MOU in effect with Iran is entirely performance-based," a White House official said in a mailed statement to, adding that Iran will only reap benefits if they exhibit "good behavior."
On the supply side, the US Energy Information Administration "expects worldwide crude oil production and trade flows to rebound to near pre-conflict levels by year's end, with most previously shut in production returning online by the first quarter of 2027."
The oil market now awaits the US EIA's petroleum inventory report, scheduled for release on Wednesday.