The United States has revoked a general license that allowed Iran to sell its crude oil and petroleum products, a key concession that was part of an interim US-Iran agreement. This reversal came on July 7, only 19 days after the license was issued on June 22. The revocation means new purchases or loading of Iranian-origin oil are barred from Tuesday, although existing transactions can be wound down until July 17. This move followed attacks on three tankers near the Strait of Hormuz, which led to a rise in regional maritime threat levels and caused oil prices to jump more than 3%.
Under June's interim US-Iran agreement, the US Treasury had issued a 60-day general license, effective until August 21, allowing Iran to sell oil on international markets. This brief period had reopened a channel for Iran's energy exports after decades of US pressure. However, the unexpected revocation has created significant uncertainty for the millions of barrels of Iranian crude already at sea, much of which lacks a clear destination. Major buyers, including China's state-owned refiners and those in India, have reportedly been hesitant to commit to purchases, citing concerns over banking finance and potential US sanctions.
Iran's foreign ministry condemned the US action, viewing it as a breach of the framework agreement to end the war and holding Washington responsible for the consequences. Analysts suggest that Iran uses attacks on ships to underscore its leverage in negotiations, particularly given its control over the Strait of Hormuz. Despite Iran's claims of shipping over 40 million barrels since the initial lifting of the naval blockade, a significant hoard of Iranian oil continues to build up in Asian waters, with over 20 million barrels idling for at least seven days. The challenge of finding buyers quickly could weaken Tehran's negotiating position, especially as European Union and UK restrictions on insurance and port access remain in place. There is also market speculation that President Donald Trump could end the window early, further complicating sales.
