Key facts
- A 60-day license allows Iran to sell oil in U.S. dollars until August 21.
- The move is linked to ongoing negotiations for a ceasefire and the reopening of the Strait of Hormuz.
- The license permits transactions from previously sanctioned vessels and entities.
- Treasury Secretary Scott Bessent cited productive talks in Switzerland as the basis for the decision.
- Iran has committed to free transit in the Strait of Hormuz and allowing IAEA inspectors.
The Trump administration has issued a 60-day license allowing Iran to sell oil in U.S. dollars, a move tied to ongoing negotiations for a ceasefire and the reopening of the Strait of Hormuz. The license, effective until August 21, permits dollar-denominated trade for crude oil, petrochemicals, and petroleum products, and allows transactions from previously sanctioned vessels and entities.
This development is part of a broader potential deal that could see the critical shipping corridor reopened, which Iran had threatened to close due to alleged ceasefire violations. The closure of the strait has previously disrupted global oil supply and driven up gasoline prices.
For decades, U.S. sanctions aimed to cripple Iran's economy by cutting it off from the dollar-based financial system. Iran has historically relied on alternative currencies and a "shadow network," primarily trading with China, which purchases about 90 percent of its oil exports. The new waiver could potentially unlock billions of dollars in oil revenue by allowing Iranian banks to receive direct payments from buyers abroad.
Treasury Secretary Scott Bessent stated the decision was linked to "productive talks" in Switzerland over the weekend aimed at negotiating a U.S.-Iran peace deal. Mediating countries Pakistan and Qatar described the high-level meeting, the first face-to-face encounter since February 28, as showing "encouraging progress."
Vice President Vance confirmed that while Iran has agreed to allow International Atomic Energy Agency (IAEA) inspectors back into the country, the specific terms of the negotiations are still being finalized. A preliminary agreement signed last week established a 60-day window to work toward a final deal, with the sanctions relief contemplated within this framework, leading to concerns about Iran receiving significant financial benefits before relinquishing its nuclear capabilities.
During his first term, President Trump withdrew the U.S. from a previous nuclear agreement and reimposed sanctions, arguing they were necessary to curb Tehran's funding of militant groups. While this temporary waiver does not permanently lift sanctions, it represents a significant sanctions relief for Iran's oil sector.
Analysts suggest Iran will likely use this 60-day period to repair oil facilities and secure long-term contracts with Chinese buyers. Former Treasury officials estimate the move could unlock between $8 billion and $9 billion in revenue from oil previously held in the Gulf, effectively reopening Iran's primary revenue stream.