The Trump administration has canceled its temporary sanctions waiver for Iranian oil exports and has started new military strikes against Iran after recent attacks on commercial ships in the Strait of Hormuz ruined a diplomatic agreement made just over two weeks ago.
On Tuesday, the Treasury Department's Office of Foreign Assets Control (OFAC) issued General License X1, which ends the sanctions relief that was granted under General License X a short time ago. This new license comes with a 10-day period to wind down existing transactions.
The new license is effective immediately and only allows actions needed to wrap up already permitted business until July 17. No new purchases or shipments of Iranian crude oil, petroleum products, or petrochemicals can be made after July 7. Payments to Iranian parties that are blocked must be placed in blocked, interest-bearing U.S. accounts.
Also on Tuesday, the U.S. Central Command announced that American forces carried out "powerful" military strikes against Iranian targets to "impose heavy costs for targeting and attacking commercial shipping crewed by innocent civilians in international waters."
According to CENTCOM, "The U.S. strikes are a response to Iranian attacks on three commercial vessels that were passing through the Strait of Hormuz. Iran's aggressive actions were unnecessary, dangerous, and a clear violation of the ceasefire."
The recent actions follow a serious decline in security around the Strait of Hormuz. In the last two days, three commercial tankers have been attacked near the U.S.-coordinated route along Oman. This has led the Joint Maritime Information Center (JMIC) to increase its threat assessment for the area from "Substantial" to "Severe," warning that more intentional attacks on merchant ships could occur.
General License X was issued on June 21 as one of the first results of the interim agreement between Washington and Tehran. Under this agreement, the U.S. promised to start lifting its maritime blockade and provide temporary sanctions relief to help resume Iranian oil exports while both sides worked on a broader deal during a 60-day negotiating period.
This authorization marked a significant shift from President Donald Trump's long-standing "maximum pressure" approach towards Iran. It allowed for the production, sale, delivery, and offloading of Iranian crude through August 21, and also authorized a range of maritime services, including insurance, vessel management, crewing, bunkering, pilotage, classification, and salvage.
Tuesday’s actions effectively reverse that policy change. With General License X now revoked, companies must wind down ongoing transactions by July 17, reinstating sanctions on new Iranian oil trade as the ceasefire and diplomatic efforts seem to have fallen apart.