The United States (US) Treasury Department said on Wednesday that it has sanctioned the Persian Gulf Strait Authority, the body Iran has set up to manage the Strait of Hormuz, the conduit for about a fifth of the global oil supply. US Treasury Secretary Scott Bessent said, “The Iranian military’s latest attempt to extort global maritime trade is proof that Economic Fury has left the regime desperate for cash.” This move by Washington could lead to de-escalation in the US-Iran negotiations towards a permanent ceasefire.

Additional Information

The authority is a body Iran has set up to manage requests for passage through the Strait of Hormuz.

Tehran’s grip on the strait has sent the world economy into turmoil.

It closed the strait after the US and Israel launched its war against Iran on February 28.

Anyone cooperating with the authority may be providing support to and receiving services from Iran’s Islamic Revolutionary Guard Corps and may be sanctioned, the Treasury said in a statement.

The Persian Gulf Strait Authority published a map last week reaffirming Tehran’s claims to a wide stretch of water on either side of the choke point.

Market reaction

There seems to be a positive response to oil prices after Washington’s fresh sanctions. As of writing, the WTI Oil price trades 1.6% higher to near $89.80.

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