The U.S. Treasury Department on Monday issued a 60-day license allowing Iran to export and sell its oil, fulfilling one of the provisions in the memorandum of understanding signed between Washington and Tehran.
Treasury Secretary Scott Bessent wrote on social media that the license was issued following Iran’s commitment to reopen the Strait of Hormuz and allow International Atomic Energy Agency inspectors back into the country.
“As part of the framework, Treasury has issued a temporary 60-day general license authorizing the production, delivery and sale of Iranian oil,” Mr. Bessent wrote.
The license fulfills a major demand of Iran prior to negotiations and provides Tehran with a pathway to make billions through the oil trade.
Iran’s oil for years has been heavily sanctioned in the West, dramatically limiting the price per barrel and the pool of customers for Tehran’s key source of revenue. Sanctions have forced Tehran to offer steep discounts for its energy. China purchases around 90% of Iran’s oil and transports it through a network of shadow tankers, according to the Treasury Department.
The U.S. earlier this year issued temporary oil waivers on Iranian oil in a bid to lower international oil prices after Tehran closed the Strait of Hormuz, a vital waterway through which at least 20% of the world’s oil passes each year.
The U.S.-Iran memorandum of understanding signed last week indicates the Treasury Department must move to immediately “issue waivers for the export of Iranian crude oil” until a final agreement is reached.
The sanctions relief component of the memorandum has received significant criticism from those in the U.S. and Israel who say the deal rewards Iran for closing the strait. Additionally, opponents of the deal say the U.S. gave up important leverage by agreeing to remove the naval blockade.
The news comes just hours after Iranian and U.S. diplomats met for the first round of peace negotiations in Switzerland. The two sides reportedly agreed to create “executive mechanisms” to ensure that the provisions of the memorandum are implemented.
However, extensive, detailed talks over Iran’s nuclear program and the potential removal of primary and secondary U.S. economic sanctions are expected to come later this week.
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