US Revokes Iran Oil Sanctions Waiver, Warns Hormuz Tanker Attacks Won’t Be Tolerated

Reversal comes just over two weeks after wartime MOU

Risk of Iranian retaliation threatens follow-up talks

The US has revoked a sanctions waiver for Iranian oil just over two weeks after granting it. The move appears to respond to recent attacks on three tankers in the Strait of Hormuz. Any Iranian backlash could also disrupt follow-up talks between Washington and Tehran.

The Treasury Department’s Office of Foreign Assets Control said on July 7 that it was canceling a 60-day temporary general license issued on June 21. The license had temporarily allowed the production, delivery and sale of Iranian oil. OFAC said Iranian oil transactions will be wound down in stages, with previously authorized deals allowed through July 17.

The US and Iran had earlier signed a wartime memorandum of understanding and agreed to waive sanctions on Iranian oil during a 60-day period of follow-up negotiations. Washington’s decision to reverse that step just over two weeks later is set to send shock waves through the talks.

A US official told Reuters that Iran’s actions in the Strait of Hormuz were “absolutely unacceptable” and that Tehran would “pay a price.” Another US official told the news agency that an initial investigation found Iran was responsible for the tanker attacks.

The US and Iran also engaged in a military clash in the Strait of Hormuz in late June over tanker attacks. After Iran struck tankers, the US carried out airstrikes on Iranian military facilities. Iran then repeatedly launched retaliatory attacks targeting US bases in the Middle East.

The US and Iran held indirect talks through mediators in Doha, Qatar, earlier in July, sustaining momentum for negotiations. Still, Washington’s decision to cancel the Iranian oil sanctions waiver could hurt the next round of talks.

Choi Su-jin, Hankyung.com reporter naive@hankyung.com