OFAC Revokes Prior Authorization For Iranian Oil Transactions

Following President Trump’s announcement that the recent ceasefire is “over” and renewed airstrikes against Iranian targets, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) on July 7, 2026, revoked Iran-related General License X (GL X), which previously authorized certain transactions involving Iranian crude oil, petrochemical products, and petroleum products. GL X, covered in our prior client alert, has been replaced with General License X1 (GL X1), which authorizes through 12:01 am EDT on July 17, 2026, all transactions ordinarily incident and necessary to wind down transactions previously authorized under GL X.

GL X was issued in connection with the Memorandum of Understanding between the Trump administration and the Iranian government, providing a temporary 60-day authorization (through August 21, 2026) for U.S. persons and their owned or controlled foreign entities to engage in transactions ordinarily incident and necessary to the production, sale, delivery, and offloading of crude oil, petrochemical products, or petroleum products of Iranian origin. GL X1, effective July 7, 2026, immediately revoked and superseded GL X, authorizing only those transactions necessary to unwind activities previously permitted under GL X within a limited period.

Key elements and restrictions of GL X1 are as follows:

• Wind-down activities are authorized for only a short 10-day window through 12:01 am EDT on July 17, 2026. These include completion of deliveries of Iranian products already negotiated and underway, and receipt or making of payments for transactions entered into during GL X’s validity (i.e. June 21 through July 6, 2026). Any related activities occurring after this wind-down period, including receipt of payments, would require specific authorization from OFAC.
• Any GL X1-authorized payments to blocked persons must be made into a blocked interest-bearing account in the United States.
• No new transactions may be entered into on or after July 7, 2026. This means no new agreements for the purchase or loading of Iranian petroleum products may be entered into, negotiated, or finalized.
• As with GL X, GL X1 does not authorize transactions involving persons in or organized under the laws of North Korea, Cuba, or the Crimea, Donetsk People’s Republic, or Luhansk People’s Republic regions of Ukraine. It also does not override other sanctions authorities or Executive Orders not specifically referenced.

Practical considerations

Companies and vessel operators involved in trades previously authorized under GL X should immediately review ongoing activities and ensure full wind-down by 12:01 am EDT on July 17, 2026. Failure to do so could expose U.S. persons and their owned or controlled foreign entities to penalties under multiple OFAC sanctions programs. Additionally, foreign persons not owned or controlled by a U.S. person—although not subject to U.S. primary sanctions—would face renewed risk under U.S. “secondary sanctions” regimes, which authorize sanctions measures for engaging in transactions involving Iranian petroleum products and other Iran-related activities.

The rapid revocation of GL X signals that the Trump administration will swiftly adjust sanctions policy as discussions with Iran evolve. Parties should closely monitor for further changes in U.S. sanctions policy, as well as accompanying OFAC authorizations, FAQs, and enforcement actions.

If you have any inquiries regarding this development or other questions on international trade regulatory requirements, please contact the authors of this article or your Winston Taylor relationship attorney.