Key insights
- The EU will expand Iran sanctions to include those blocking the Strait of Hormuz, impacting global energy supplies. Iran effectively closed the strait after US-Israeli strikes, disrupting oil and LNG markets. While briefly reopened, tensions remain high after the US seized an Iranian cargo ship. This escalation increases geopolitical risk and could negatively affect US equities, particularly energy and shipping sectors, due to potential supply chain disruptions and increased energy prices.
By Julia Payne and John Irish
BRUSSELS/PARIS, April 20 (Reuters) - The European Union will expand the criteria of its Iran sanctions to include those responsible for blocking the Strait of Hormuz, which has been largely shut for nearly two months upending global energy and commodities markets, two EU diplomats said.
Tehran effectively closed the strait after U.S.-Israeli strikes on Iran began on February 28, cutting off roughly one-fifth of the world’s oil and liquefied natural gas supplies.
More than a dozen tankers sailed through Hormuz after Iran briefly declared it open on Friday, but the ceasefire agreement was thrown into jeopardy after the United States seized an Iranian cargo ship as it maintained its own military blockade of Iranian ports.
"There was a political agreement among ambassadors that we indeed would change the criteria in Iran’s sanctions regime so that we could also list persons and entities that are responsible for the obstruction of the freedom of navigation in the Strait of Hormuz," one of the diplomats said.
A second diplomatic source said the European External Action Service would need a few weeks to prepare any new listings. The EEAS is in charge of placing people and companies under sanctions while the European Commission handles sector-wide restrictions.
In January, the EU designated Iran’s Revolutionary Guards (IRGC) as a terrorist organisation and in March it listed Iranian officials for human rights violations.