Oil prices jumped to their highest level since June 25 on Tuesday after the U.S. revoked a temporary sanctions waiver that had allowed the sale of Iranian oil on the global market.
The Trump administration took the action after unknown projectiles hit multiple tankers near the Strait of Hormuz.
In late afternoon trading, U.S. crude oil rose more than 5%, to more than $72 per barrel. International Brent crude oil also rose 5.3%, to more than $75 per barrel.
“As President Trump and the administration have repeatedly affirmed, the [memorandum of understanding] in effect with Iran is entirely performance-based,” a U.S. official told NBC News on Tuesday afternoon.
“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,” the official added.
The revoked waiver, listed on the Treasury Department’s website, said the move was effective immediately. It also said any production, delivery or sale of Iranian oil must be wound down by July 17.
The waiver had originally allowed sales until Aug. 21.
Earlier Tuesday, the U.K.’s Maritime Trade Operations Center said it had received two reports of attacks on ships “transiting the Strait of Hormuz.” One of them was “struck by an unknown Uncrewed Aerial Vehicle,” the agency said, and a second was “struck by an unidentified projectile and is believed to have structural damage.”
An attack Tuesday on a third ship off Oman caused a fire to break out on board, the trade agency said.
The temporary sanctions waiver had brought some relief to oil markets, where supplies have been extremely limited, given that the critical Strait of Hormuz has been effectively closed to ship traffic for months.
A U.S. official confirmed the U.K. trade agency reports, telling NBC News earlier Tuesday that Iran’s Islamic Revolutionary Guard Corps had fired missiles at two ships Tuesday and struck a third commercial vessel with at least one drone.
The U.S. military also shot down additional drones fired by Iran, the official said.
Adding to worries for oil traders Tuesday was a report from Reuters that one of the ships, which it identified as a liquefied natural gas tanker, the Al Rekayyat, was “at risk of exploding due to a fire in its engine room.” NBC News has not been able to verify the report.
U.S. Treasury yields rose along with oil prices and hit their highest levels of the day after the oil sanctions waiver was revoked. The 20- and 30-year yields broke above 5%, while the 10-year U.S. government bond yield, which more heavily influences consumer borrowing rates than others, rose to its highest level since early June.
Stocks also neared their lowest levels of the day as oil prices jumped, but the S&P 500 closed down off its worst level of the day, down just 0.45%.
The Nasdaq 100 index fell harder, however, ending the day down by nearly 2%. Most of the losses were attributable to heavy selling in chip stocks and tech companies after shares of Samsung plunged 7% overnight.
Chip stocks add to market woes
Samsung, one of the world’s largest chip and memory manufacturers, reported better-than-expected earnings early Tuesday. But investors noted that the earnings beat was not as large as some had expected, triggering a sell-off in the company’s shares.
Samsung “stock crumbled in a wave of profit taking, sending shockwaves through the U.S. market a day after participants appeared to re-embrace volatile chip names,” Joe Mazzola, Charles Schwab’s head trading and derivatives strategist, wrote in a note Tuesday.
But Samsung is only the latest major tech company in recent months to see its stock fall sharply despite reporting strong earnings. Investors remain cautious and easily spooked by any signs that the euphoria carrying AI stocks could be slowing.
Adding to the pressure on chip stocks Tuesday was a report from Reuters that the Chinese AI startup DeepSeek is developing its own AI chip. Over time, that could reduce the company’s reliance on chips from American suppliers.
