Key facts
- The Trump administration reinstated sanctions on Iran's oil sales, revoking a previously granted waiver.
- The decision was attributed to Iran's actions in the Strait of Hormuz, deemed 'wholly unacceptable'.
- Companies have a 10-day period to wind down existing transactions, with payments to be made into a U.S. blocked account.
- The Joint Maritime Information Center raised the threat level for the Strait of Hormuz to 'severe' due to recent attacks.
- Three commercial tankers were reportedly attacked in the Strait of Hormuz in the preceding two days.
Oil prices surged more than 5 percent after the U.S. revoked its waiver on Iranian oil sanctions, following attacks on three commercial vessels near the Strait of Hormuz. International Brent crude oil jumped nearly 5.5 percent to more than $75 per barrel.
A U.S. official stated that Iran's actions in the strait were 'wholly unacceptable' and that the waiver was performance-based. The Treasury Department issued a new document indicating that transactions previously authorized under the waiver must wind down by July 17, with payments to be made into a U.S. blocked account. This waiver was part of a memorandum of understanding (MOU) intended to pause hostilities.
Iran's deputy foreign minister accused the U.S. of violating the MOU and threatened decisive actions to safeguard national interests. The attacks on the ships prompted U.S. Central Command to launch retaliatory strikes. The Joint Maritime Information Center classified the threat level for the Strait of Hormuz, which carries roughly 20 percent of global oil and gas exports, as 'severe'.