The United States conducted new strikes against Iran and reinstated sanctions on Iranian oil sales on Tuesday, in retaliation for a series of attacks on commercial ships near the Strait of Hormuz. This dual action marks a significant challenge to the fragile ceasefire between the US and Iran. The US Treasury Department revoked a waiver that had temporarily lifted oil sanctions as part of a memorandum of understanding signed last month. This economic measure, in particular, eliminated a central concession made to Iran for its reopening of the Strait of Hormuz.
The US Central Command announced it had launched "powerful" strikes, hitting over 80 targets, including Iranian missile launch sites and command centers, in response to attacks on three oil tankers. Iran's foreign ministry labeled the US's actions as a breach of the memorandum and proof of bad faith. Meanwhile, Iran responded by targeting US military sites in Bahrain and Kuwait. One of the attacked tankers, a liquefied natural gas vessel, was hit off Oman's coast, while the other two sustained damage but continued their voyage. Global oil prices reacted significantly to the news: Brent crude rose 3% to $76 a barrel, while US oil surged nearly 6%, surpassing $70 for the first time since June 30.
The reimposition of sanctions gives buyers of Iranian oil until July 17 to wind down any ongoing transactions. When sanctions were temporarily lifted, Iran was able to freely sell tens of millions of barrels of oil held in floating storage. Iran had relied on a shadow fleet to evade sanctions for years, with most of its oil sales going to China. Iran's oil sales account for about 50% of its revenue, according to the US Energy Information Administration. The broader impact of the waiver's revocation on oil markets is yet to be fully seen, especially concerning how the US will enforce restrictions and whether it will resort to another military blockade in the Strait of Hormuz.
