US eases Iran oil sanctions, allows dollar trade in major policy shift

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

General License X opens door to oil trade

The exemption, issued under General License X, also permits transactions involving vessels and entities that were previously subject to U.S. sanctions.

The waiver effectively reopens the possibility of U.S. imports of Iranian crude oil, a trade that has largely disappeared since the 1990s due to stringent American sanctions.

The move represents the most significant easing of U.S. oil sanctions on Iran since the 1979 Islamic Revolution, reversing decades of economic pressure aimed at limiting Tehran's oil revenues.

Iran could gain billions in revenue

Analysts estimate the decision could unlock around 67 million barrels of Iranian crude currently stored in floating inventories in the Gulf.

According to Miad Maleki, a former U.S. Treasury sanctions official and now a senior fellow at the Foundation for Defense of Democracies, the exemption could generate between $8 billion and $9 billion in additional revenue for Iran.

"Production, sales, dollar payments, petrochemicals and protected shipping — all switched on at once," Maleki said, describing the move as a substantial reopening of Iran's most important source of income.

Trump defends sanctions relief

US President Donald Trump defended the decision, saying profits from Iranian oil sales were intended to be used for purchasing American agricultural products rather than strengthening Iran's military capabilities.

The sanctions relief follows a memorandum of understanding signed between Washington and Tehran last week.

Negotiations held in Switzerland and concluded on Monday reportedly made progress toward a broader agreement.

Iranian oil exports already rising

Iran's crude exports have shown signs of recovery as diplomatic talks advanced.

According to maritime intelligence firm Windward, Iran exported 6.79 million barrels of crude last week, the highest weekly level recorded in two months.

Analysts say Iranian crude, which traditionally trades at a discount to global benchmarks, could command higher prices if demand continues to increase, boosting Tehran's earnings further.

China expected to increase purchases

The exemption allows Iran to receive oil revenues directly through its central bank, eliminating the need for complex payment routes through intermediary institutions.

Experts believe the change could encourage China, which currently purchases about 90 per cent of Iran's oil exports, to increase imports significantly.

Maleki said the authorisation of dollar clearing removes a major obstacle that previously limited trade volumes and could trigger a rapid replenishment of Chinese crude inventories before the exemption expires.

Buyers assess new trading framework

Despite expectations of increased demand, analysts say many buyers are still evaluating the implications of the sanctions relief and conducting compliance reviews before entering the market.

Muyu Xu, senior oil analyst at Kpler, said Chinese buyers remain interested in Iranian crude, though actual purchases will depend on pricing and cargo availability.

Iran looks to rebuild and secure long-term deals

Experts believe Tehran will use the 60-day window to repair oil infrastructure damaged during recent conflicts and negotiate longer-term supply agreements with key buyers.

Michael Feller, chief strategist at Geopolitical Strategy, said the exemption would provide a significant boost to Iran's economy and strengthen perceptions of a diplomatic victory for the country.