The United States has issued its most sweeping rollback of Iran oil sanctions since the 1979 Islamic Revolution, allowing dollar-denominated crude trade for the first time in over four decades.
The U.S. Treasury on Monday issued a wide-ranging 60-day exemption permitting Iran to produce and sell crude oil, petrochemical, and petroleum products in U.S. dollars through 21 August.
Known as General License X, the waiver clears vessels and entities previously subject to U.S. sanctions to engage in transactions with Iranian counterparts without penalty.
The license also theoretically reopens the door to U.S. imports of Iranian crude, a trade that has effectively collapsed since the 1990s under the weight of heavy sanctions, according to the U.S. Energy Information Administration.
The move could unlock a floating inventory of around 67 million barrels of Iranian crude currently stranded in the Gulf, handing Tehran a potential windfall of $8 to $9 billion.
That estimate comes from 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,” Maleki said. “Together, they amount to a sustained reopening of Iran’s most important revenue stream.”
U.S. President Donald Trump defended the move, saying any oil profits were intended for Iran to purchase American agricultural goods rather than rebuild its military capabilities.
The sanctions relief followed a memorandum of understanding signed last week between the U.S. and Iran, with talks in Switzerland concluding Monday having yielded positive progress toward a final deal.
Iranian crude exports have already been picking up in recent weeks as negotiations progressed, with 6.79 million barrels shipped out last week, the highest level in two months, according to maritime intelligence firm Windward.
Brett Erickson, a managing principal at Obsidian Risk Advisors, noted that Iranian crude, which typically trades at a discount to global benchmarks, could shift to a premium above Brent given rising demand pressure, further swelling Tehran’s revenue.
The exemption allows Iran to receive oil proceeds directly into its central bank, reducing transaction costs previously incurred by routing payments through shadow banking intermediaries.
“With dollar clearing now authorized, expect China to accelerate purchases aggressively,” Maleki said, noting that Chinese buyers previously settled transactions through opaque channels to avoid secondary U.S. sanctions exposure.
China currently purchases roughly 90% of Iran’s total oil exports, with independent refineries known as teapots accounting for the bulk of Chinese imports from the country.
Maleki expects a rapid storage top-off cycle under which Chinese buyers rush to replenish stockpiles before the exemption expires in August, once internal compliance reviews are completed.
Muyu Xu, senior oil analyst at Kpler, said signs of a pickup have yet to materialise, with buyers scrambling to assess the new authorisation and complete compliance reviews, particularly those not previously active in Iranian crude.
Michael Feller, chief strategist at Geopolitical Strategy, said Iran will likely use this 60-day window to repair war-damaged oil facilities and lock in longer-term contracts with Chinese buyers.
“This will be a huge boost to Iran, both to its economy and its sense of victory,” Feller said.