US Tightens Blockade, Sanctions as Iran-US Conflict Intensifies in Strait of Hormuz
The United States has tightened its blockade and sanctions on Iranian crude, exacerbating tensions in the Strait of Hormuz. Since late February 2026, a war between Iran, the US, and Israel has intermittently blocked oil traffic through this critical passage. The standoff between Washington and Tehran over Hormuz has led to successive US naval campaigns cutting off a significant share of cargoes shipped through the route.
Private Chinese refiners, main buyers of Iranian crude, now face a dwindling supply and higher prices for available cargoes. The negotiating window opened by the Islamabad memorandum between presidents Donald Trump and Masoud Pezeshkian expired at midnight on August 17, 2026. Treasury Secretary Scott Bessent announced a new round of sanctions on Thursday, August 20, with details to be published on Monday, August 24.
The US toolkit combines naval blockade and financial sanctions as separate levers. The naval blockade physically targets vessels entering or leaving Iranian ports, while financial sanctions target buyers, charterers, flag registries, and payment channels. A general license issued by the US Treasury's Office of Foreign Assets Control (OFAC) had temporarily suspended these measures before being revoked weeks later.