U.S. issues sweeping Iran oil sanctions waivers, unlocking billions in revenue for Tehran

The U.S. has issued a sweeping rollback of sanctions on Iranian oil, allowing dollar-denominated trade for the first time in more than four decades, as Washington and Tehran press on with fragile talks toward a permanent peace deal.

The U.S. Treasury on Monday issued a wide-ranging 60-day exemption allowing Iran to produce and sell crude oil, petrochemical and petroleum products in U.S. dollars through Aug. 21.

Under the so-called General License X, vessels and entities previously subject to U.S. sanctions are also cleared for transactions. The waiver also theoretically reopens the door to U.S. imports of Iranian crude, a trade which has effectively collapsed since the 1990s under the weight of heavy sanctions, according to the U.S. Energy Information Administration.

The move on Monday marks the most sweeping rollback of American oil sanctions against Iran since the 1979 Islamic Revolution, reversing years of pressure designed to cripple Iran's economy, and is expected to deliver billions in oil revenue for the Iranian regime.

The license could unlock a floating inventory of around 67 million barrels of Iranian crude stranded in the Gulf, handing Iran a potential financial windfall of $8 to $9 billion according to Miad Maleki, a former Treasury sanctions official and now a senior fellow at the Foundation for Defense of Democracies, a Washington-based think tank.

“Production, sales, dollar payments, petrochemicals and protected shipping — all switched on at once,” he said. “Together, they amount to a sustained reopening of Iran's most important revenue stream.”

U.S. President Donald Trump defended the lifting of the sanctions, saying on Monday that any oil profits were meant for Iran to purchase American agricultural goods, rather than rebuild its military.

The latest sanctions relief followed a memorandum of understanding signed last week between the U.S. and Iran. Talks in Switzerland that concluded Monday have yielded positive progress toward a final deal.

Iranian crude exports have picked up in recent weeks as the U.S.-Iran negotiations progressed, with 6.79 million barrels shipped out last week — the highest level in two months — according to maritime intelligence firm Windward.

Iranian crude, which typically trades at a discount to global benchmarks, could also shift to a premium above Brent given demand pressure, further increasing Tehran's revenue windfall, said Brett Erickson, a managing principal at Obsidian Risk Advisors.