US issues appeals for lifting Iran oil sanctions, unlocking billions in revenue for Tehran
The Brugge oil tanker docked at the Port of Long Beach in Long Beach, California, US, Thursday, May 7, 2026.
Tim Rue | Bloomberg | Getty Images
The United States has issued a new lifting of sanctions on Iranian oil, allowing the dollar to trade for the first time in more than four decades, as Washington and Tehran continue fragile talks on a permanent peace deal.
The US Treasury on Monday issued a broad 60-day exemption allowing Iran to produce and sell crude oil, petrochemical and petroleum products in US dollars until Aug. 21.
Under the so-called General License X, ships and businesses previously subject to US sanctions are also cleared to operate. The waiver also opens the door to US imports of Iran’s crude, a trade that has fallen since the 1990s under the weight of heavy sanctions, according to the US Energy Information Administration.
Monday’s move marks the largest lifting of US oil sanctions against Iran since the 1979 Islamic Revolution, reversing years of pressure designed to cripple Iran’s economy, and is expected to bring billions in oil revenue to the Iranian government.
The license would unlock a floating total of about 67 million barrels of Iranian crude stuck in the Gulf, giving Iran about $8 billion to $9 billion, according to Miad Maleki, a former Treasury sanctions official who is now a senior official at the Foundation for Defense of Democracies, a Washington-based think tank.
“Production, sales, dollar payments, petrochemicals and secure shipping – all open at the same time,” he said. “Together, it amounts to the continued reopening of Iran’s most important revenue route.”
US President Donald Trump has defended the lifting of sanctions, saying on Monday that any oil profits would be for Iran to buy US agricultural goods, rather than rebuilding its military.
The latest relief from sanctions follows a cooperation agreement signed last week between the US and Iran. Negotiations in Switzerland that concluded on Monday completed progress towards a final agreement.
Sales of Iranian crude have picked up in recent weeks as US-Iran talks continue, with 6.79 million barrels shipped last week – the highest level in two months – according to offshore intelligence firm Windward.
Iranian crude, which typically trades at a discount to global benchmarks, could also move higher than Brent given the pressure on demand, further exacerbating Tehran’s decline in revenue, said Brett Erickson, managing principal at Obsidian Risk Advisors.
A shadowy network
The latest liberalization allows Iran to receive oil payments directly from its central bank, reducing transaction costs previously incurred by channeling payments through banking intermediaries.
“Since the purchase of the dollar has now been approved, expect China to speed up the purchase,” said Maleki. Chinese buyers have, in the past, settled transactions through obscure channels to avoid exposure to the second US sanctions.
The license removes major banking frictions, giving state-owned refiners and private refiners, or teapots, access to intermediary banking networks they previously had to avoid, Maleki said. He expects a “top-off cycle” of immediate storage in which Chinese buyers can rush to fill stocks before the release expires in August.
China currently buys about 90% of Iran’s oil exports, with teapots accounting for the majority of China’s imports. The country’s crude sales fell by an unprecedented 4.8 million barrels per day between February and May – a steeper drop than the 4 MBd drop seen during the height of the pandemic in the second half of 2020, according to JPMorgan.
The signs of the van are yet to be seen, said Muyu Xu, senior oil analyst at Kpler. Buyers are trying to assess new approvals and comprehensive internal compliance reviews — especially those that previously did not apply to Iranian crude, Xu said.
That said, Chinese consumer interest will eventually pick up, although actual purchases will depend on prices and availability, Xu added.
Iran will likely use this 60-day window to repair war-damaged oil facilities and close long-term contracts with Chinese buyers, said Michael Feller, chief strategist at Geopolitical Strategy. “This will be a big boost for Iran, its economy and its sense of victory.”
