US revokes Iran oil sanctions waiver over Strait of Hormuz tanker attacks, clouding nuclear talks

The United States has abruptly revoked a sanctions waiver on Iranian crude oil, citing a series of tanker attacks in the Strait of Hormuz, in a move that could significantly undermine the fragile momentum behind ongoing negotiations between the two countries.

The Treasury Department's Office of Foreign Assets Control announced Tuesday that it was canceling a 60-day temporary general license issued June 21 that had permitted the production, delivery and sale of Iranian crude oil.

The waiver had been granted as a temporary measure to remain in effect during 60 days of follow-on negotiations after the two countries signed a ceasefire memorandum of understanding — and Washington pulled it back little more than two weeks after it was issued.

However, OFAC said transactions involving Iranian crude oil would still be permitted through July 17 to allow time to wind down existing deals.

The move is widely seen as a direct response to the recent attacks on three oil tankers in the Strait of Hormuz in quick succession.

According to Reuters, a senior US government official said Iran's conduct in the Strait of Hormuz was "absolutely unacceptable" and that Tehran "will pay a price." A separate official said initial findings from the probe indicated Iran was behind the tanker attacks.

Tensions had already flared late last month when the two sides exchanged military strikes on consecutive days following the tanker attacks. After Iran struck the vessels, the US bombed Iranian military facilities, and Iran retaliated by targeting US military bases in the Middle East — an exchange that continued for two days.

The clashes had raised fears that the follow-on negotiating schedule would be derailed, but both sides managed to keep talks alive, meeting indirectly through a mediating country in Doha, Qatar, earlier this month.

The revocation of the oil sanctions waiver now threatens to set those talks back further. Iran could move quickly to denounce the decision as a breach of the trust needed to sustain negotiations and mount a sharp countermove.

The waiver had provided Iran with critical economic relief amid intense pressure from the US and the international community, and analysts warn that revoking it could provoke a forceful Iranian response.

Such a response would cast a deep shadow over follow-on talks that were already facing long odds. When the two sides agreed to the ceasefire MOU last month, they deferred the thorniest issue — denuclearization — to the 60-day negotiating period, and a final agreement was widely seen as far from certain even before this latest development.