U.S. Suspends Sanctions on Iranian Oil for 60 Days Amid Ongoing Talks

The United States has lifted sanctions on Iranian oil through August 21, according to a document from the Office of Foreign Assets Control, the Treasury Department’s sanctions enforcement arm. The move follows a memorandum of understanding being negotiated between Washington and Tehran, with talks taking place in Switzerland under Pakistani sponsorship and in cooperation with Qatar.

The published order removes from the sanctions list products considered essential for the production, sale, transport and unloading of crude oil, petrochemical products and petroleum products of Iranian origin, including money transfers involving blocked vessels. In practice, it means Iranian oil, previously barred from sale, will become a commodity that many more parties can handle.

The article says this is a reversal of the U.S. approach. At the start of the war, sanctions on Iranian and Russian oil were eased to try to lower prices, but after the U.S. failed to open the Strait of Hormuz, which Iran had blocked, and Iranian oil revenues kept rising because of higher prices, Washington restored sanctions and imposed its own naval blockade on Iran.

Oil prices have fallen sharply since the memorandum was signed, but Brent is still at $78 a barrel, below wartime peaks above $100 and $110, yet above the roughly $60 level seen at the start of the year. Although the understanding is supposed to reopen the Strait of Hormuz, traffic there remains limited and will take time to normalize, especially in the central channel away from the coasts of Iran and Oman. The result is that Iran is expected to regain the ability to sell oil while prices remain relatively high.