US revokes Iran oil sale licence in a threat to fragile truce after ships attacked

WASHINGTON - The United States is revoking a general licence authorising the sale of Iranian oil, according to a US official, who also warned of consequences over Iran’s actions in the Strait of Hormuz after three tankers were hit on July 7 in the strategic waterway.

After a day in which huge crowds mourned Iran’s slain Supreme Leader Ayatollah Ali Khamenei in the holy city of Qom, oil prices rose more than 3 per cent on news of the US announcement and maritime security sources told Reuters that one of the ships attacked, an LNG carrier, could be at risk of explosion.

The incidents were only the latest to threaten the fragile ceasefire that the US and Iran struck in June, pausing the conflict that started in February with US and Israeli strikes across the Islamic Republic.

In a potentially major blow to that agreement, Washington moved on July 7 to withdraw a key concession that had allowed Iran to sell oil on international markets.

The US official said negotiators continued to work in good faith towards a final agreement with Iran.

But control of the strait has given Tehran immense leverage, effectively allowing it to force a stalemate with the world’s most powerful military.

Analysts say Tehran uses attacks on ships to underscore that leverage as it negotiates a long-term peace deal with the US.

Under June’s interim US-Iran agreement, the US Treasury issued a June 22 general licence to allow the sale of crude oil and petrochemical and petroleum products of Iranian origin through Aug 21.

In revoking that licence on July 7, it gave Iran until July 17 to wind down any transactions.

Qatar blamed Iran for attacking the vessels, including the huge Qatari liquefied natural gas tanker, the Al Rekayyat, which reported being struck overnight by a drone that caused a fire in its engine room. The crew were safe and being evacuated.

A Saudi-flagged crude oil tanker, believed to be the supertanker Wedyan, was also damaged off Oman, maritime security sources said. The cause was not immediately clear.

Qatar’s foreign ministry said it had summoned Iran’s deputy ambassador and handed him a protest note following the attack on the tanker.

Iran’s foreign ministry said Qatar’s accusations were perplexing and that Tehran was diligently fulfilling its commitments but asserted that commercial vessels faced risks for using routes not coordinated with Iran.

A second US official, speaking on condition of anonymity, said initial indications were that Iran had fired at three commercial vessels.

Hundreds of thousands take to streets in Qom

Iran’s clerical rulers aim to install a permanent system to collect fees in what would amount to a huge shift of the balance of power in a region where Washington has long acted as guarantor of security.

At home, the leadership has used the mourning for Khamenei that began last week to show its control after Khamenei was killed with his daughter, granddaughter, son-in-law and daughter-in-law on the war’s first day.

The caskets of the slain leader and family were driven through the streets of the seminary city of Qom on July 7, where many hundreds of thousands of people carried flags and banners comparing Khamenei to revered Shi’ite martyrs.

In chants they vowed to avenge Khamenei. Some bore placards and banners reading “KILL TRUMP”.

Later on July 7, Iranian state media showed what it said was footage of a plane carrying Khamenei’s coffin at the airport of the Shi’ite holy shrine city of Najaf in neighbouring Iraq.

The coffin of Iran’s late supreme leader, Ayatollah Ali Khamenei is carried from a plane after arriving in Najaf, Iraq, on July 7. PHOTO: REUTERS

Trump: ‘Make a deal or we’re going to finish the job’

The war has been paused under the interim peace deal reached in June, intended to provide a 60-day period for negotiations on a permanent deal.

A round of indirect talks in Qatar ended last week with no sign of headway towards a lasting peace.

US President Donald Trump has repeatedly threatened to resume bombing, most recently on July 6 when he told reporters in the Oval Office: “We’re either going to make a deal or we’re going to finish the job... We can knock down their bridges in one hour, we can knock out their energy supply.”

Iran’s Foreign Minister Abbas Araqchi said that under the terms of the interim ceasefire memorandum, negotiations on the final deal would “not commence if threats continue”.

In launching the war four months ago, Trump said his aims were to destroy Iran’s nuclear and missile programmes, end its ability to threaten its neighbours and create conditions for Iranians to topple their leaders.

None of those goals has been met, although Washington says a permanent deal will halt what it says is an Iranian programme that could make a nuclear bomb, which Iran says it never sought. REUTERS