The problem was with mailgun. Their automated system accidentally marked my account as suspicious, imposing some limit on the number of emails that can be sent from the account.
I created a support ticket and the issue was resolved after their verification.
This was the reply from Mailgun
After further review, your account was automatically placed on an evaluation period [1], which limits the account in various ways such as this. To help protect our customers against spam, we have automated systems in place to flag accounts that appear suspicious. On most occasions, this process works very well; however, sometimes we get it wrong and flag a genuine account. There are a number of factors that contribute to the flagging of the account for business verification, but they are not necessarily directly related to you.