The Trump administration has retracted its temporary sanctions exemption for Iranian oil exports and initiated military strikes against Iran following recent assaults on commercial shipping in the Strait of Hormuz. This escalation has come just weeks after a diplomatic agreement appeared to be in reach. The Treasury Department’s Office of Foreign Assets Control (OFAC) announced General License X1, which revokes the previously granted sanctions relief and introduces a 10-day wind-down period for ongoing transactions.
Effective immediately, the new licensing allows only activities necessary to conclude transactions authorized prior to July 17, prohibiting any new purchases or shipments of Iranian oil after July 7. Payments to Iranian entities now must be directed to blocked, interest-bearing U.S. accounts instead of facilitating trade.
In parallel, U.S. Central Command reported launching significant military strikes on Iranian positions, aiming to deter further attacks on civilian vessels traversing international waters. This action was prompted by Iran’s aggressive targeting of three commercial tankers in the Strait, which prompted increased caution from the Joint Maritime Information Center regarding potential future attacks.
Previously, General License X represented a notable shift away from President Trump’s stringent “maximum pressure” strategy, allowing for a range of maritime services related to Iranian oil exports. However, the recent decisions effectively reverse this policy adjustment, indicating a collapse of the ceasefire and diplomatic negotiations. Companies must now wind down existing transactions, as sanctions on new Iranian oil trades are reinstated.
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