On June 21, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Iran General License X (GL X) broadly—if temporarily—authorizing U.S. persons to engage in a range of transactions involving Iranian-origin crude oil, petrochemicals, and petroleum products. GL X was issued in connection with the Memorandum of Understanding (MOU) the Trump administration entered into with the Iranian government to resolve the ongoing military conflict with Iran and represents a marked departure from the direction and intent of U.S. sanctions in recent years.
Key features of General License X
GL X temporarily authorizes for 60 days (i.e. through 12:01 am Eastern Daylight Time on August 21, 2026) all transactions “that are ordinarily incident and necessary to the production, sale, delivery, or offloading of crude oil, petrochemical products, or petroleum products of Iranian origin,” with certain exceptions as discussed further below. Incidental transactions covered by the authorization include operational and commercial services, including docking and anchoring of vessels, emergency repairs or environmental mitigation or protection activities, vessel management, crewing, bunkering, piloting, registration, flagging, insurance, classification, and salvage. GL X further clarifies that products covered by the authorization include those produced by entities sanctioned under the Iranian Transactions and Sanctions Regulations (31 CFR Part 560), the Iranian Financial Sanctions Regulations (31 CFR Part 561), and the Global Terrorism Sanctions Regulations (31 CFR Part 594).
Notably—and a further sharp departure from prior U.S. policy—GL X authorizes the direct importation into the U.S. of Iranian crude oil, petrochemicals, and petroleum products, as well as the use of U.S. dollars in support of authorized transactions. Additionally, GL X authorizes transactions involving vessels that are designated on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List) and blocked under U.S. sanctions authorities for involvement in Iran’s petroleum trade, effectively allowing transactions with a large portion of the Russian and Iranian “shadow fleet” during the license period.
Limitations to General License X
GL X expressly excludes transactions involving persons connected to North Korea, Cuba, or the Crimea, Donetsk People’s Republic, and Luhansk People’s Republic regions of Ukraine. Additionally, transactions prohibited under other OFAC sanctions measures remain prohibited.
GL X also only authorizes transactions by U.S. persons subject to U.S. sanctions against Iran, which includes entities organized under U.S. laws, U.S. citizens and permanent residents wherever located or employed, other persons physically in the United States, and non-U.S. entities owned or controlled by U.S. persons. GL X does not specifically authorize transactions by non-U.S. persons that face potential liability under so-called “secondary sanctions” that authorize penalties for engaging in transactions involving Iranian petroleum products and other Iran-related transactions. However, OFAC generally has taken the position that non-U.S. persons would not be exposed to secondary sanctions risk for engaging in transactions that otherwise would be authorized for U.S. persons. It is expected that a similar policy would be applied to transactions conducted by non-U.S. persons that conform to the requirements of GL X.
Practical considerations
Although OFAC’s issuance of GL X provides immediate, time-limited relief from restrictions on Iran’s energy sector with significant implications for global energy markets, the underlying sanctions architecture remains intact. Persons operating withing the bounds of GL X should adopt a cautious, compliance-driven approach, with particular attention to:
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Non-U.S. jurisdictions: Parties will need to carefully navigate U.K. and EU restrictions, particularly with respect to insurance coverage, shipping services, and currency transfers. More specifically, while the EU does not maintain sanctions on Iran that are directly equivalent to the U.S. secondary sanctions regime, various EU restrictive measures remain in force. Enhanced due diligence and careful assessment of counterparties, financial flows, and sector-specific restrictions remain advisable pending greater policy alignment across jurisdictions. As a result, EU financial institutions, insurers, and service providers might continue to adopt a cautious approach to Iran-related transactions notwithstanding the temporary U.S. relief.
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Counterparty due diligence: GL X does not suspend all Iran-related sanctions; screening for designated parties and restricted sectors remains critical.
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Recordkeeping: Entities relying on GL X should maintain clear records—demonstrating that transactions fall within the scope of “ordinarily incident and necessary” activities authorized by the license—for a period of at least 10 years pursuant to 31 CFR § 501.601.
Finally, the latest news reports indicate some disagreement between the U.S. and Iran as to the MOU and expected undertakings by both parties. Persons relying on GL X should continually monitor the situation for any further developments, including revocation of GL X or curtailment of the scope of authorization.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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