The United States on Tuesday revoked a general license that allowed the sale of Iranian oil, as a US official warned that Iran’s actions in the Strait of Hormuz were “completely unacceptable” and it would face consequences following attacks on tankers in the strategic waterway.
Oil prices rose more than five percent after this announcement. The US Treasury said it would allow a wind-down period until July 17 for Iranian oil transactions that were permitted under the now-rescinded license.
The US official said that negotiators continued to work in good faith toward reaching a final agreement with Iran despite the recent escalation.
The British Navy’s UKMTO agency said in a report that the American move came after three oil tankers were exposed to unknown projectiles in and near the Strait of Hormuz in recent days. There was no immediate comment from Tehran or any claim of responsibility.
The attacks and the US response threaten to put the fragile diplomatic understanding between Washington and Tehran on shaky ground, raising the risk that further retaliation could derail negotiations on a broader agreement.
Related videos
Another US official, speaking on condition of anonymity, said initial indications were that Iran had fired on three commercial ships.
Get breaking national news
Get Canada breaking news delivered to your inbox as it happens so you never miss a trending story.
The potential escalation comes at a time when the two sides were working to reach an agreement that includes imposing restrictions on Iran’s nuclear program and easing some sanctions, including restrictions on oil exports.
The Strait of Hormuz, a narrow waterway between Iran and Oman, is one of the world’s most important energy corridors, with nearly a fifth of global oil consumption and large amounts of liquefied natural gas shipments passing through it every day.
Any prolonged outage could lead to higher energy prices and increased pressure on consumers and governments already facing rising fuel costs.
Oil exports remain an important source of revenue for Iran, providing billions of dollars in hard currency that helps finance government spending and support an economy weakened by years of US sanctions.
Despite the restrictions, Tehran has been able to expand shipments in recent years, largely to China, making oil sales one of the country’s most important economic lifelines.
Any renewed effort to limit those exports could put additional pressure on Iran’s finances and its ability to maintain domestic programs and regional activities.
