The United States is revoking a general license that authorized the sale of Iranian oil, a U.S. official said on Tuesday, warning that Iran’s actions in the Strait of Hormuz were “wholly unacceptable” and would be met with consequences after attacks on tankers in the strategic waterway. Oil prices rose more than 3% following the announcement. The U.S. official said negotiators continued to work in good faith toward a final agreement with Iran despite the latest escalation.
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 attacks and the U.S. response threaten to put a fragile 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.
The potential escalation comes as both sides had been working toward a deal that included limits on Iran’s nuclear program and relief from 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 chokepoints, with roughly a fifth of global oil consumption and large volumes of liquefied natural gas shipments passing through each day.
Any prolonged disruption could push up energy prices and increase pressure on consumers and governments already facing higher fuel costs.
Oil exports remain a critical source of revenue for Iran, providing billions of dollars in hard currency that help fund government spending and support an economy weakened by years of U.S. sanctions.
Despite restrictions, Tehran has managed 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 curb those exports could put additional pressure on Iran’s finances and its ability to sustain domestic programs and regional activities.
(Reporting By Steve Holland and Jarrett Renshaw; additional reporting by Ismail Shakil and Daphne Psaledakis; editing by Costas Pitas)