The Treasury Department on Monday issued a 60-day license allowing the production, delivery, and sale of Iranian oil as part of the preliminary U.S.-Iran deal signed last week.
Iran stands to reap significant financial rewards from the reprieve, which represents a sharp reversal of American policy. Most importantly, it clears a path for the country to export its oil at market rates after many years of being forced to sell at a discount to find buyers willing to take the risk of running afoul of U.S. economic restrictions.
But the Trump administration has signaled that it’s ready to provide Iran with financial rewards for opening the Strait of Hormuz and ending the war, which has destabilized the global economy.
Treasury Secretary Scott Bessent said on social media that the sanctions exemption was the result of “ongoing productive” talks with Iran that are taking place in Switzerland.
“Iran has committed to free and open transit in the Strait of Hormuz and to permit International Atomic Energy Agency (IAEA) inspectors into their country,” Mr. Bessent wrote in a post on X.
The Trump administration provided Iran with temporary sanctions relief earlier this year as it tried to curb oil prices by allowing more crude supplies to flow to global markets. The U.S. then ramped up sanctions and created a military blockade preventing the sale of Iranian oil as part of an effort to cripple its economy.
The new license, which expires on Aug. 21, gives Iran greater access to American currency by allowing the country to conduct oil transactions using U.S. dollars. It also allows American importers to buy Iranian crude oil, petrochemical products and petroleum products.
Iran produced less than 5 percent of the world’s oil before the war, with the vast majority of its exports going to China. But it was forced to sharply curtail production in recent months because of a U.S. blockade. Time will tell how quickly the country will be able to restart those wells, which can be a tricky process. Iran will also have to repair energy infrastructure damaged in the war.
The Trump administration has faced criticism for striking an initial agreement with Iran that critics say is overly accommodating and more generous than the 2015 Joint Comprehensive Plan of Action that the Obama administration and other world powers reached with Iran to curb its nuclear program.
“It’s also important to note that sanctions relief was not provided immediately when the JCPOA was enacted, it happened at ‘Implementation Day’ — six months after the IAEA verified the nuclear commitments were fulfilled,” said Daniel Tannebaum, a senior fellow at the Atlantic Council who previously served as the Office of Foreign Assets Control compliance coordinator for the Federal Reserve Bank of New York.
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