US Treasury issues general license for Iran oil sales

The Office of Foreign Assets Control (OFAC) license follows direct talks between the U.S. and Iran in Switzerland, which U.S. vice president JD Vance described as making "very good progress." The waiver's 60-day duration aligns with the period set by the US-Iran "memorandum of understanding" for negotiations on Iran's nuclear program and the status of the Strait of Hormuz.

The interim deal allows for potential extensions of negotiations and sanctions waivers. Conversely, a breakdown in relations could lead to the termination of the waiver. The OFAC license provides detailed specifications for all transactions associated with the sale, transportation, and offloading of Iranian crude and products, including allowing the use of tankers on the U.S. sanctions list and imports into the U.S. for trans-shipment.

While the license waives sanctions on buyers, it does not lift sanctions on Iranian sellers. Historically, most Iranian crude was sold to Chinese independent refiners. With waivers in place, state-controlled Chinese companies and buyers in India and other Asian countries may be motivated to purchase Iranian crude, though current lower prices have not yet spurred buying interest from Chinese firms. Many buyers may remain cautious due to the waiver's short term and the risk of sanctions being reinstated.