Crude futures rallied in after-hours trading on Tuesday after the US Central Command said it had launched attacks in response to Iran striking three tankers transiting the Strait of Hormuz, while the US revoked a waiver that had authorized Iranian crude sales.
Front-month West Texas Intermediate crude futures advanced 5.1% to $72.05 per barrel, while Brent futures climbed 5.2% to $75.76/bbl.
Soojin Kim, a research analyst at MUFG, said crude prices edged higher after renewed attacks on commercial vessels in the Strait of Hormuz highlighted persistent security risks.
On Tuesday, the US Treasury Department revoked a waiver that allowed the sale of Iranian oil in response to attacks on tankers in the Hormuz, after reports of attacks on vessels near and around the strategic waterway revived fears of supply disruptions.
The Treasury's Office of Foreign Assets Control on Tuesday issued a new General License X1, stating that no new transactions involving Iranian oil may take place on or after July 7.
On June 22, General License X was issued in the wake of the peace agreement, allowing transactions for 60 days and valid through August 21.
Additionally, the US Central Command said that it had launched a fresh wave of attacks on Iran as retaliation for the earlier attacks on shipping.
"US Central Command forces have 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," Centcom posted on X on Tuesday.
Centcom added that the strikes were "in response to Iranian attacks on three commercial vessels that were transiting the Strait of Hormuz."
"Iran's demonstrated aggression was unwarranted, dangerous, and a clear violation of the ceasefire," it added.
As of Tuesday, a total of three tankers were struck by projectiles in the Strait of Hormuz, the UK Maritime Trade Operations said, with two fresh attacks on Tuesday targeting vessels transiting the strategic waterway that is central to the US-Iran negotiations. Another tanker had been attacked on Monday.
Iran's Islamic Revolutionary Guard Corps attacked a liquefied natural gas carrier after ignoring warnings while passing through the Omani route, according to Iranian media reports.
Qatar's foreign ministry spokesperson, Majed Al Ansari, said the targeting of the Qatari tanker near the Hormuz was an unacceptable attack on the security of international navigation and global energy supplies.
Al Ansari called on Tehran to "immediately cease all practices that undermine regional security or threaten the safety of international maritime navigation." A Saudi-flagged crude oil tanker, Widian, was also damaged off Oman's coast.
Saxo Bank strategists said oil prices rose after a Qatari LNG ship was struck by a projectile near the Omani coast as it exited the Strait, raising unease among shipowners while once again testing the US-Iran peace deal.
Meanwhile, global crude prices are projected to face renewed downward pressure as crude production rebounds and trade flows via the strategic waterway recover following the US-Iran peace deal to end the Middle East conflict, according to the Energy Information Administration.
The EIA in its Short-Term Energy Outlook slashed its Brent spot price forecast for Q3 to an average of $74/bbl, about $27/bbl lower than its previous outlook.
The agency projected that US gasoline prices would average about $3.80 per gallon in Q3, down from over $4.20 per gallon in Q2. The decline is forecast to be driven by lower crude oil prices, which account for the largest share of gasoline production costs.
The EIA said that the recovery in supply and the restoration of oil trade flows are expected to ease pressure on global inventories. The agency now forecasts global oil inventories to decline by 2.2 million barrels per day in Q3, lower than its previous forecast of over 7 million b/d.