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Trump Calls Iran Peace Accord 'Over' Following Escalation in Strait of Hormuz

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Global energy markets experienced renewed volatility as US President Donald Trump called the interim ceasefire memorandum of understanding with Iran is "over" on Wednesday.

Speaking ahead of a NATO summit in Turkey, the US president stated that the Pakistan-mediated ceasefire accord is over and called it "a waste of time."

Oil prices surged following the news and Brent crude futures gained more than 6% to $78.71 a barrel as traders factored in potential geopolitical risk premiums from supply disruptions.

This follows an immediate escalation of military actions in the Middle East. On Tuesday, the US Central Command launched a massive wave of retaliatory airstrikes across Iran after three commercial oil tankers were targeted and struck by projectiles in the strategic Strait of Hormuz.

Simultaneously, the economic components of the peace accord have been swiftly dismantled.

The US Treasury Department's Office of Foreign Assets Control officially revoked General License X, the temporary 60-day waiver enacted on June 21 that had allowed Iran to openly market and export crude oil, petroleum products, and petrochemicals in US dollars.

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Oil & Energy

Update: US Treasury Revokes Iran Oil Sales Authorization, Sets July 17 Wind-Down Deadline

(Updates with a response from the White House in paragraphs 5-8.)The US revoked its general license authorizing certain Iranian oil transactions and allowed a wind-down period through July 17, the Department of the Treasury's Office of Foreign Assets Control said in a statement on Tuesday.The Department revoked the earlier Iran-related General License X and replaced it with General License X1, effective July 7. The new license replaces the June 21 authorization in its entirety.On June 22, OFAC issued Iran General License X, "Authorizing the Production, Delivery and Sale of Crude Oil, Petrochemical Products, and Petroleum Products of Iranian-Origin through August 21, 2026."However, Tuesday's license has revoked this authorization of new transactions involving the production, purchase, loading, sale, delivery, or offloading of Iranian crude oil, petrochemical products, or petroleum products on or after July 7, except where necessary to complete the wind-down.OFAC is revoking GL X, which authorized the sale of Iranian oil, a US official confirmed tovia email."As President Trump and the administration have repeatedly affirmed, the MOU in effect with Iran is entirely performance-based," the official said, adding that Iran will only reap benefits if they exhibit "good behavior."The officials said diplomatic efforts remain underway, but Iran's recent actions were "wholly unacceptable.""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 towards a final deal," the official said.The new license also excludes transactions involving parties in North Korea, Cuba, or the covered and Crimea regions of Ukraine, as well as activities prohibited under other applicable sanctions authorities.The US action followed reports from the British navy-linked United Kingdom Maritime Trade Operations agency that commercial tankers sustained damage from unidentified projectiles in and around the Strait of Hormuz in recent days. Two strikes on tankers in the strait were reported on Tuesday, while another tanker was hit on Monday.General License X1 authorizes transactions ordinarily necessary to wind down activities previously permitted under General License X through 12:01 a.m. Eastern Daylight Time on July 17, provided payments to blocked persons are made into blocked, interest-bearing US accounts.Oil markets reacted sharply to the announcement, with Brent crude rising about 5% to $75.58 per barrel and US West Texas Intermediate increasing about 4.7% to $71.80/bbl.

Oil & Energy

Market Chatter: Israel Proposes Oil Pipeline Linking Gulf to Europe

Israel proposed a new oil transportation corridor connecting Gulf producers with European markets through its existing pipeline network, offering an alternative to the Strait of Hormuz and Red Sea shipping lanes, Reuters reported Tuesday, citing Energy Minister Eli Cohen.Cohen said the concept calls for a roughly 700-kilometer pipeline from Saudi Arabia to Israel's Red Sea city of Eilat, where crude would move through the country's pipeline system to the Mediterranean port of Ashkelon, the report said.He said the proposal would reduce exporters' exposure to regional maritime disruptions and provide Gulf producers with another route to European customers, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Oil & Energy

US Treasury Revokes Iran Oil Sales Authorization, Sets July 17 Wind-Down Deadline

The US revoked its general license authorizing certain Iranian oil transactions and allowed a wind-down period through July 17, the Department of the Treasury's Office of Foreign Assets Control said in a statement on Tuesday.The Department revoked the earlier Iran-related General License X and replaced it with General License X1, effective July 7. The new license replaces the June 21 authorization in its entirety.On June 22, OFAC issued Iran General License X, "Authorizing the Production, Delivery and Sale of Crude Oil, Petrochemical Products, and Petroleum Products of Iranian-Origin through August 21, 2026."However, Tuesday's license has revoked this authorization of new transactions involving the production, purchase, loading, sale, delivery, or offloading of Iranian crude oil, petrochemical products, or petroleum products on or after July 7, except where necessary to complete the wind-down.The new license also excludes transactions involving parties in North Korea, Cuba, or the covered and Crimea regions of Ukraine, as well as activities prohibited under other applicable sanctions authorities.The US action followed reports from the British navy-linked United Kingdom Maritime Trade Operations agency that commercial tankers sustained damage from unidentified projectiles in and around the Strait of Hormuz in recent days. Two strikes on tankers in the strait were reported on Tuesday, while another tanker was hit on Monday.General License X1 authorizes transactions ordinarily necessary to wind down activities previously permitted under General License X through 12:01 a.m. Eastern Daylight Time on July 17, provided payments to blocked persons are made into blocked, interest-bearing US accounts.The White House did not immediately respond to' request for comment.Oil markets reacted sharply to the announcement, with Brent crude rising about 5% to $75.58 per barrel and US West Texas Intermediate increasing about 4.7% to $71.80/bbl.