What to Know
- OFAC issued Iran General License X on June 22, 2026, authorizing transactions involving Iranian oil, petroleum, and petrochemical products until August 21, 2026.
- The 60-day window reflects hopes for a full nuclear deal, but the license could be extended if negotiations run past the deadline.
- Companies must vet all parties involved and ensure contracts stay within the license’s specific scope and expiration date before engaging.
Under the United States-Iran memorandum of understanding (MoU) signed on June 17, 2026, the United States pledged to issue sanctions relief related to the Iranian oil sector:
The United States of America undertakes that immediately upon the signing of this MoU, and until the termination of sanctions, the U.S. Department of Treasury will issue waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services including banking transactions, insurances, transportation, etc.[1]
And, as leaders from each country meet in Switzerland to continue negotiations, on June 22, 2026, the Treasury’s Office of Foreign Assets Control (OFAC) issued Iran General License X (GL X) implementing that commitment. While not surprising in light of the MoU, GL X is nonetheless remarkable, marking a seismic shift in US sanctions policy towards Iran and particularly its energy sector, which has been in various forms restricted since the US stopped importing Iranian oil in the late 1970s following the Iranian revolution. Below we explain what GL X authorizes and what might come next.
GL X Authorizations
GL X authorizes, until August 21, 2026, all transactions[2] that are ordinarily incident and necessary to the production, sale, delivery, or offloading of crude oil, petrochemical products, or petroleum products of Iranian origin, including transactions involving blocked vessels, including:
- transactions for the safe docking and anchoring of vessels carrying such crude oil, petrochemical products, or petroleum products;
- the preservation of the health or safety of the crew of any such vessel;
- emergency repairs or environmental mitigation or protection activities relating to any such vessel or to such crude oil, petrochemical products, or petroleum products held in storage; and
- services such as vessel management, crewing, bunkering, piloting, registration, flagging, insurance, classification, and salvage.
Of note, GL X permits importation into the United States of these products, where the importation is ordinarily incident and necessary, and payment of funds owed to Iran, the Government of Iran, or any blocked person to be made in US dollars.
GL X Limitations
- Temporal: The authorization only extends until August 21, 2026, consistent with the 60-day period referenced in the MoU. While OFAC could extend that period, it will depend entirely on how the negotiations progress in the coming weeks.
- Parties: GL X does not authorize transactions involving a person located in or organized under the laws of the Democratic People’s Republic of Korea, the Republic of Cuba, the Covered Regions of Ukraine (the so-called Donetsk People’s Republic and Luhansk People’s Republic), the Crimea Region of Ukraine, or any entity that is owned or controlled by or in a joint venture with such persons.
- Transactions: GL X does not authorize activities prohibited by any other regulation or E.O. than those listed in footnote 2.
Moving Forward
With GL X, OFAC is wholly — albeit with temporal limitations — restoring the Iranian oil sector to a place of normalcy in the global market after more than half a century of using restrictions on that sector to try to effect social and political change. This shift presents both an incredible opportunity to engage with this sizable but long-forbidden sector, and incredible risk, given the dynamic nature of the Iran – US negotiations and potential for authorization to be revoked.
It is notable that while the MoU pledged authorization “until the termination of sanctions,” the GL itself has a time limit of 60 days. This is because the governments hope to reach an agreement ending sanctions during that period. However, in the event that deadline is not met, it seems likely — though not certain — that, all other things being equal, OFAC will extend the license while negotiations continue.
Companies considering engaging in authorized activities should, at minimum, conduct thorough due diligence to ensure that no prohibited parties are involved, and take care to ensure that any contracts are for transactions specifically identified in GL and do not extend beyond the August 21 deadline.
Bracewell’s sanctions lawyers are ready to advise on any of these matters.
[1] Islamabad Memorandum of Understanding Between the Islamic Republic of Iran and the United States of America, NPR, NPR (June 18, 2026), https://www.npr.org/2026/06/18/nx-s1-5863027/us-iran-trump-memorandum-of-understanding-full-text
[2] Specifically, GL X authorizes transactions that would otherwise be blocked under several sanctions regimes, including: Iranian Transactions and Sanctions Regulations, 31 CFR part 560; Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587; Ukraine-/Russia-Related Sanctions Regulations, 31 CFR part 589; Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 CFR part 544; Iranian Financial Sanctions Regulations, 31 CFR part 561; Iranian Sector and Human Rights Abuses Sanctions Regulations, 31 CFR part 562; Global Terrorism Sanctions Regulations, 31 CFR part 594; Executive Order (E.O.) 13846 of August 6, 2018 (“Reimposing Certain Sanctions With Respect to Iran”); E.O. 13876 of June 24, 2019 (“Imposing Sanctions With Respect to Iran”); E.O. 13902 of January 10, 2020 (“Imposing Sanctions With Respect to Additional Sectors of Iran”); E.O. 13949 of September 21, 2020 (“Blocking Property of Certain Persons with Respect to the Conventional Arms Activities of Iran”).
