Iran Attacks Tankers, U.S. Reinstates Oil Sanctions After Hormuz Deal Breaks Down

Iran attacked multiple tankers in the Strait of Hormuz this week, prompting the United States to reinstate oil sanctions and threaten to reimpose a naval blockade. The attacks followed a memorandum of understanding under which the U.S. had lifted its blockade and temporarily removed sanctions on Iranian oil sales three weeks earlier.

Iran has insisted since the deal that ships may use the strait safely only if they follow a northern route through its territorial waters. The memorandum's fifth paragraph states that Tehran "will make arrangements using its best efforts" to ensure safe passage, but it left specific routes undefined.

" >"The underlying problem here is that the memorandum of understanding did not reach an understanding with respect to the management of ship traffic through the strait. The international community "has an unsuspended right" to transit the strait without any impediments.

Ship operators are favoring the Iranian route over the corridor along Oman's coast, according to the trade intelligence firm Kpler. Oil prices have risen more than 4% this week. Crude oil was trading around $71 per barrel on Friday while Brent, the international benchmark, is hovering just under $76.

Prices remain well below Brent's wartime highs of around $122 per barrel.