US freezes oil sales to Iran after ‘unacceptable’ Strait of Hormuz strikes – National
The United States revoked on Tuesday the general license authorizing the sale of Iranian oil, as a US official warned that Iran’s actions in the Strait of Hormuz are “absolutely unacceptable” and will be met with consequences after the attack on tankers in the waterway.
Oil prices rose more than five percent following the announcement. The US Treasury Department said it would allow a moratorium until July 17 on oil transactions in Iran that were allowed under a license that has now been revoked.
A US official has said that negotiations continue to work in good faith on a final deal with Iran despite the latest escalation.
The US move came after three tankers reported being hit by unidentified projectiles near the Strait of Hormuz in recent days, Britain’s UKMTO said in a report. There was no immediate comment from Tehran, or any claim of responsibility.
The attack and the US response threaten to put a strain on the understanding between Washington and Tehran, which risks further retaliation derailing negotiations on a comprehensive agreement.
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Another US official, who did not want to be named, said initial indications were that Iran had shot down three commercial vessels.
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The potential escalation comes as the two sides work to strike a deal that includes curbs on Iran’s nuclear program and relief from other 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 crossings, with about a fifth of the world’s oil consumption and a large amount of liquefied natural gas passing through every day.
Any prolonged disruption could raise electricity prices and increase pressure on consumers and governments already facing higher fuel costs.
Oil exports remain a key source of income for Iran, providing billions of dollars in hard currency that help fund government spending and prop up an economy weakened by years of US sanctions.
Despite the restrictions, Tehran has been able to increase exports in recent years, especially to China, making oil sales one of the most important lifelines for the country’s economy.
Any renewed effort to curb those exports could put further pressure on Iran’s finances and its ability to support domestic programs and regional activities.
