The United States (US) has officially lifted economic sanctions on Iran's oil sector, allowing commercial transactions using US dollars for the first time in more than 40 years. The US Treasury Department has issued a "General License X" for an interim period of 60 days until August 21, in line with the positive progress of peace talks between the two countries in Switzerland.
The exemption marks Washington's biggest policy correction since the 1979 Islamic Revolution, which was previously aimed at crippling the Iranian economy. The relaxation not only covers the production and sale of crude oil, petroleum products and petrochemicals, but also lifts restrictions on merchant ships and opens the way for direct imports by the US.
Financial sanctions expert from the Foundation for Defense of Democracies (FDD), Miad Maleki, predicts that this decision will be able to open up an inventory of 67 million barrels of Iranian crude oil stranded in the Persian Gulf. The implication is that the Iranian regime will receive a windfall of $8 to $9 billion from the simultaneous restoration of its main revenue stream.
The commercial easing also allows Iran to receive cash proceeds directly into its central bank accounts, thus eliminating the cost of a chain of intermediaries through shadow banking. Markets expect major importers such as China, which controls 90% of Iran’s exports through independent refineries, to accelerate their purchasing activities to replenish their stockpiles before the general license expires.
President Donald Trump defended his administration’s actions by insisting that the oil sales proceeds were specifically limited to enable Iran to buy agricultural goods from the United States, and not for military purposes. At the same time, geopolitical analysts believe that Iran will use the 60-day window to repair post-war oil facilities and sign long-term supply contracts.
