"Cancelling the deal would be Boy Scout naiveté at best, and against our national interest in reality."

Couldn't agree more, Sam.  Naiveté puts it kindly.  A sanctimonious self-inflicted gunshot wound would be more accurate.  The buyers will indeed simply buy from our allies, and may take umbrage with our moralizing by taking their other business elsewhere too.

Same goes for our oil and gas too.  If we decide not to develop and sell, our allies (mainly those industrious Americans) will be more than happy to meet the demand.