US Greenlights Iranian Oil
U.S. Grants 60-Day Iran Oil License Amid Swiss Talks, Dropping Oil Prices
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Key Points
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Treasury Secretary Scott Bessent said the license is based on Iran’s commitments to “free and open transit in the Strait of Hormuz” and to “permit International Atomic Energy Agency (IAEA) inspectors into their country,” describing it as a framework tied to ongoing talks in Switzerland.
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Under the memorandum of understanding referenced in the announcement, the U.S. agreed to issue waivers not only for exporting Iranian crude and petroleum products, but also for “all associated services, including banking transactions, insurance, and transportation.”
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The general license authorizes imports into the U.S. of Iranian-origin oil and products “under the waiver when necessary to complete its sale or delivery,” adding a specific operational condition beyond the summary’s general “specified conditions.”
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A separate report citing Treasury posted on its website said the authorization runs through Aug. 21, 2026—providing a stated end date year that is not specified in the summary.
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Market reaction included specific price levels: WTI fell about 3.00% to $74.93 a barrel, while Brent dropped about 2.75% to below $78, reflecting traders pricing in possible renewed Iranian supply.
The U.S. Treasury Department issued a general license on June 22 allowing Iran to resume limited crude oil and petroleum product sales — and the oil market felt it immediately. Bloomberg reported that WTI crude fell 3% to $74.93 a barrel, while Brent dropped 2.75% to below $78, as traders priced in the return of Iranian supply.
The license runs through August 21, 2026, and covers not just oil exports but also "all associated services, including banking transactions, insurance, and transportation," according to The Jerusalem Post. It does not amount to a full sanctions rollback. Shipments tied to North Korea, Cuba, and Ukraine remain banned.
Bessent Ties Oil Waiver to Hormuz and IAEA Access
Treasury Secretary Scott Bessent said the license is rooted in two Iranian commitments. First, Iran pledged to keep transit through the Strait of Hormuz "free and open." Second, Tehran agreed to let International Atomic Energy Agency inspectors back into the country. Bessent called it "a confidence-building step toward a broader agreement."
The deal traces back to a Memorandum of Understanding negotiated in Switzerland. DevDiscourse reported that backchannel talks in Geneva and Zurich had been building toward a "freeze-for-freeze" framework since early 2026. Iran submitted a formal letter of intent to the IAEA on June 10, clearing the path for the Treasury announcement twelve days later.
What the License Actually Allows — and Bars
The general license permits the production, delivery, and sale of Iranian-origin crude oil and petroleum products. It also allows imports into the United States "when necessary to complete a sale or delivery" — a provision that caught many market analysts off guard, according to Bloomberg. Most had expected the waiver to cover only Asian or European buyers.
However, the authorization comes with hard limits. Sanctions on transactions linked to North Korea, Cuba, and sanctioned Ukrainian entities stay in place. The license expires August 21, 2026, giving the U.S. a clear off-ramp if Iran blocks an IAEA inspector or disrupts tanker traffic.
Oil Prices Drop as Iranian Barrels Return to Market
Traders responded fast. At the New York open, WTI hit $74.93 a barrel — down 3% on the day. Brent crude fell 2.75%, slipping below the key $78 mark. International Business Times noted that the sell-off reflected markets pricing in up to 1 million additional barrels per day if the license is eventually extended past August.
The banking and insurance provisions are seen as the most consequential piece. They allow Iran to use formal financial channels — including SWIFT — for these specific sales. Previously, sanctions middlemen ate 20–30% of Iran's oil revenue. That cost now drops sharply for authorized transactions.
Tehran Calls It a Win; Critics Call It Appeasement
Iranian officials welcomed the move. A Foreign Ministry spokesperson said the waiver "proves the failure of the policy of isolation" and called it "a positive signal that could ease economic pressure." For ordinary Iranians, a stronger Rial could offer temporary relief from the hyperinflation that has hit the country's middle class hard.
At home, critics in Congress pushed back hard. Lawmakers argued that the banking and transportation provisions hand Iran a hard-currency lifeline that could fund regional proxies. Diplomatic analysts offered a middle view. The August 21 expiration date, they noted, keeps the U.S. in control. "If an IAEA inspector is blocked tomorrow," one expert said, "the license can be revoked by Wednesday."
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