Oil prices rise after attacks on tankers in Strait of Hormuz, U.S. revokes Iran sale authorization

Oil prices rose Tuesday after Iran attacked a tanker from Qatar near the strategically vital Strait of Hormuz.

The attack near the waterway, which typically handles around 20% of the world's oil traffic, reaffirm the fragility of the U.S. and Iran's interim peace agreement, as they negotiate a permanent end to their war.

Brent crude futures, the international benchmark, settled 3% higher at $74.16 per ounce. U.S. West Texas Intermediate futures advanced 2.8% to $70.44.

Iran attacked the Qatari liquefied natural gas tanker Al-Rekayyat while it was transiting near the Strait of Hormuz, said Dr. Majed al Ansari, the spokesperson for Qatar's Ministry of Foreign Affairs.

"We demand that the Islamic Republic of Iran immediately cease all practices that undermine regional security or threaten the safety of international maritime navigation," al Ansari said in a social media post. "We hold it fully legally responsible for this attack & for any resulting damages & consequences."

Qatar's confirmation of the attack comes after the United Kingdom Maritime Trade Operations Centre reported Monday that a tanker was struck by an unknown projectile about 8 nautical miles east of Limah, Oman. The UKMTO is a maritime security alert service.

Another tanker transiting Hormuz on Tuesday was apparently hit by an unidentified projectile and is believed to have suffered structural damage, the UKMTO said in another incident report.

Oil prices over the last three months.

Washington and Tehran signed a memorandum of understanding last month to bring their nearly four-month war to an end.

Prices, however, extended gains after hours after the U.S. revoked Iran's license to sell its oil. "As President Trump and the administration have repeatedly affirmed, the MOU in effect with Iran is entirely performance-based," a U.S. official said to CNBC.

Brent popped 5.6% to $76.04 in after hours trading, while WTI jumped 5.4% to $72.25.

"The situation around the Strait of Hormuz remains unsettled. But as we have argued since March, both sides should ultimately have an interest in containing the conflict," Holger Schmieding, chief economist at Berenberg, said in a research note published Friday.

"Ahead of the mid-term elections to Congress on 3 November, US President Donald Trump wants low oil prices whereas the Revolutionary Guards in Tehran covet the money from potential sanctions relief," they added.