US Revokes Iran’s License to Sell Oil in Retaliation for Tanker Attacks
The U.S. Department of the Treasury issued an immediate change to the general license it had issued for the sale of Iranian oil, revoking and suspending all sales. The move came as retaliation for Iran’s attacks on three tankers in the past 24 hours and repeated threats to all shipping not gaining permission and using its shipping lane.
Hours earlier, the Joint Maritime Information Center had raised the threat level to severe for the Strait of Hormuz. It confirmed a total of three attacks, including two tankers and one LNG carrier, while saying transits on the Omani route had been steady. It, however, warned, “IRGC attacks, hailing, UAS activity, and targeted surveillance continued throughout the period, indicating sustained monitoring of commercial shipping and a continued intent to assert presence across key transit lanes.”
The Office of Foreign Assets Control said the license was revoked and suspended as of today, July 7. It, however, gave 10 days to wind down any transactions previously authorized, but it requires that the payments be made into a blocked account in the United States.
Oil markets had already been jittery after the reports earlier in the day of the new attacks. The benchmark Brent oil price jumped three percent, and in late trading, U.S. oil is up six percent. The major stock market indices all retreated.
A U.S. official commented that “Iran will only reap benefits if they exhibit good behavior. Iran’s actions in the Strait are wholly unacceptable to the United States and will be met with consequences.”
Donald Trump had repeated his threats to reporters yesterday in Washington, D.C., before leaving for the NATO summit. He said if Iran did not sign a peace deal, the United States would have to finish what it started. He said it would be easy and quick to take out bridges and the Iranian power supply, but he did not want to impact the ordinary citizens.
It is unclear how today's revocation would impact the millions of barrels of oil Iran has already shipped. The NGO United Against Nuclear Iran (UANI) reports it has tracked 43 tankers departing with roughly $4.5 billion in cargo. Total estimates since the U.S. provided the General License in June are that as many as 55 million barrels had been shipped by Iran. TankerTrackers.com reported today that Iran is loading six million barrels of crude oil at Kharg Island.
The peace talks had been suspended after reports of progress. Iran has not yet commented on the latest developments, but had stopped the talks for the multi-day funeral of its supreme leader, who was killed in the first hours of the war. U.S. officials said that its negotiators were still working in good faith to complete the deal.
Iranian State TV repeated today the assertions of the IRGC that it had total authority over the Strait. The reports said the ships that were attacked had not requested permission and had been warned.
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Separately, in a letter to the International Maritime Organization, Iran again asserted its authority over the portions of the Strait of Hormuz that passed through its territorial seas. It rejected the United Nations Convention on the Law of the Seas (UNCLOS), saying Iran is not a party to the treaty. It said it was its sovereign right to oversee shipping in its territorial waters.
Iran has established the Persian Gulf Strait Authority to oversee the waterway. Under the terms of the Memorandum of Understanding with the United States, it was to maintain free transit through the Strait for the 60-day period. Its so-called authority, however, had already been speaking of a possible future requirement for insurance and saying shipping had to transit on its route.
