The USA proceeded with the most sweeping lifting of sanctions on Iranian oil since the Islamic Revolution of 1979, allowing for the first time in four decades commercial transactions in dollars. The US Treasury Department issued a broad 60-day exemption (via the so-called General License X), which allows Iran to produce and sell crude oil and petrochemical products until August 21.
This historic decision, which comes after progress in the peace talks of Switzerland, theoretically opens the door even for the import of Iranian crude into the USA, a trade that has essentially collapsed since the 1990s under the weight of strict measures. This is a move that reverses Washington’s multi-year strategy, which aimed at the economic paralysis of Iran, and comes to light following the positive progress recorded in the peace talks for a permanent agreement.
In more detail, the license will “unlock” approximately 67 million barrels of Iranian crude that remain trapped in floating storage in the Gulf, securing for Tehran unexpected revenues amounting to 8 to 9 billion dollars. For his part, President Donald Trump defended the move, stating that Iran’s oil profits are intended for the purchase of American agricultural products and not for the reconstruction of the Iranian military.
The new exemption removes banking obstacles and allows Iran to receive the revenues directly into its central bank, bypassing the costly shadow banking system. As a result, China – which already absorbs 90% of Iranian exports – is expected to aggressively accelerate its purchases in order to replenish its strategic reserves before the deadline expires in August.
As analysts estimate, Iran will exploit this 60-day window to repair oil facilities that had suffered damage and to “lock in” long-term contracts, a fact that will give a tremendous boost to its economy and will radically change the data in the global energy market.
