US Treasury Restarts Ban on Iranian Oil in Response to Ship Attacks
2026-07-07
The US Treasury Department said on the 7th that it had reimposed sanctions banning imports of Iranian crude oil and petrochemical products. It had suspended sanctions on Iran for two months in June, but reversed course after Iran attacked three merchant vessels transiting the Strait of Hormuz.
Ban Reimposed
In a notice released on the 7th, the Treasury Department's Office of Foreign Assets Control (OFAC) said it would not permit transactions involving Iranian crude oil, petrochemical products and related goods from that date onward. After the US and Iran signed a memorandum to end hostilities on June 17, OFAC had said it would suspend sanctions from June 21 to August 21 and allow imports and exports of Iranian crude oil.
Grace Period and Market Reaction
OFAC asked companies to complete shipping and settlement by the 17th for Iranian crude and other goods that had already been exported and were in transit. It also banned direct payments to Iran. On the news of the renewed ban, US crude futures jumped, with front-month August WTI briefly rising 6% from the previous day to $72.51 a barrel. The move underscored concerns over tighter oil supply.
Attacks Cloud Talks
US Central Command posted on X on the 7th that it had begun a 'strong attack' on Iran and said it would make Tehran 'pay the price' for assaults on merchant ships. The Wall Street Journal, citing sources, said Iran's Revolutionary Guard attacked merchant vessels with missiles. The UK Maritime Trade Operations also said a tanker was attacked and caught fire off eastern Oman near the Strait of Hormuz.
The two sides had been negotiating for a final agreement to end the fighting, but the exchanges of attacks have continued and the outlook has become increasingly uncertain. Iran exported crude oil to Japan, South Korea, Europe and other markets until around 2018, but countries have since cut imports after the first Trump administration withdrew from the nuclear deal that year and began sanctions.
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