US reinstates sanctions on Iranian oil sales after LNG, oil tanker attacks

The United ‌States on Tuesday re-imposed sanctions on Iranian oil, as a U.S. official warned that Iran's attacks on vessels in the Strait of Hormuz were "wholly unacceptable" and would be met with consequences.

Oil prices were up more than 5% following the announcement. The U.S. Treasury had authorized last month Iran oil sales until August 21 as part of the fragile agreement between Tehran and Washington. Tuesday's revocation cuts that wind-down period to an end date ⁠of July 17.

The U.S. move came after three tankers reported being struck by unknown projectiles in and near the Strait of Hormuz in recent days, the British navy-affiliated agency UKMTO said in a report. There was no immediate comment from Tehran, or any claim of responsibility.

The U.S. official said negotiators continued to work in good faith toward a final agreement with Iran despite the latest escalation.

The attacks and the U.S. response threaten to put the diplomatic understanding between Washington and Tehran on shaky ground, raising the risk that further retaliation could derail negotiations over a broader agreement.

Another U.S. official, speaking on condition of anonymity, said initial indications were that Iran ‌had fired ⁠at three commercial vessels.

Reuters