Oil prices surged early Wednesday after US President Donald Trump said the memorandum of understanding with Iran "is over," implying the end of a ceasefire signed with Tehran in June.
The West Texas Intermediate crude oil futures soared 4.9% to $73.86 after, according to CNN, Trump said he believes the pact has ended following an exchange of strikes between the US and Iran across the Middle East.
The Islamic Revolutionary Guard Corps launched strikes on US military targets across Bahrain and Kuwait in response to a wave of US attacks, the news report cited the IRGC as saying.
The escalation comes after the US Treasury Department revoked a general license that authorized the sale of Iranian oil, petrochemicals, and petroleum products, according to a statement from the Office of Foreign Assets Control.
"Effective July 7, 2026, General License X, dated June 21, 2026, is revoked and superseded in its entirety by General License X1," according to the statement.
The revocation followed two tankers being struck by projectiles in the Strait of Hormuz on Tuesday, per media reports citing the United Kingdom Maritime Trade Operations centre. The OFAC is offering a short grace period until 12:01 a.m. ET on July 17 to close authorized transactions under the June 21 order, according to the statement.
The US launched strikes and reimposed sanctions on Iranian oil sales as "punishment" for attacks on ships near the Strait of Hormuz, CNN cited an American official.