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Overview
On June 22, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Iran General License X (GL X), titled “Authorizing the Production, Delivery and Sale of Crude Oil, Petrochemical Products, and Petroleum Products of Iranian-Origin through August 21, 2026.”
As detailed further below, GL X provides a time-limited authorization for a broad category of transactions that would otherwise be prohibited under multiple Iran-related sanctions authorities, including the Iranian Transactions and Sanctions Regulations, the Iranian Financial Sanctions Regulations and the Global Terrorism Sanctions Regulations. The license represents a significant but temporary relaxation of restrictions affecting Iran’s oil sector while leaving intact the broader and highly complex U.S. sanctions architecture applicable to Iran.
The license comes against the backdrop of rapidly evolving U.S.-Iran developments, most notably following the signing of the U.S.-Iran Memorandum of Understanding last week, which we discussed here.
Scope of authorized activities
GL X authorizes all transactions that are “ordinarily incident and necessary” to the production, sale, delivery or offloading of Iranian-origin crude oil, petrochemical products and petroleum products. The authorization is drafted broadly and seemingly encompasses activities across the full value chain, including shipping, logistics and operational support.
Additionally, the license expressly contemplates transactions involving vessels, including currently blocked vessels, and covers services such as vessel management, crewing, bunkering, insurance and port services as well as emergency repairs and environmental mitigation activities. It also confirms that importation of Iranian-origin oil and petroleum products into the United States may be authorized where it is ordinarily incident and necessary to transactions permitted by the license.
Notably, GL X permits payments owed to Iran, the Government of Iran or other blocked persons in connection with authorized transactions to be made in U.S. dollars. The scope of the authorization extends to Iranian-origin oil produced by entities sanctioned under multiple programs.
Timing considerations
The authorization under GL X is expressly limited in duration and remains in effect only until 12:01 a.m. Eastern Daylight Time on August 21, 2026. We note that this relatively short authorization window places practical constraints on market participants seeking to rely on the license.
Although OFAC has, in other contexts, sometimes issued extensions or successive general licenses, there is no assurance that similar action will be taken here. As a result, parties should plan on the basis that all elements of a transaction, including lifting, transport, delivery and payment, may need to be completed within the authorized period.
Limitations
GL X includes certain express limitations. It does not authorize transactions involving specified jurisdictions, including North Korea, Cuba and certain occupied regions of Ukraine that are subject to comprehensive U.S. sanctions embargoes, or persons located in or organized under the laws of those jurisdictions. It also does not authorize activities prohibited under authorities not expressly referenced in the license. Notably, the license does not include any comparable carve-out from its scope for transactions involving Chinese entities, in contrast to a number of recently issued Venezuela-related general licenses. To the extent such entities are designated as Specially Designated Nationals (SDNs), dealings with them would only be authorized where they fall within the scope of activities permitted by GL X.
Interaction with counterterrorism designations
GL X expressly authorizes transactions involving Iranian-origin oil that may be produced or handled by entities designated under OFAC financial sanctions programs referenced in the license, including those listed by OFAC pursuant to counterterrorism authorities. However, the license does not expressly address potential issues arising under statutory regimes relating to Foreign Terrorist Organizations (FTOs), including those involving Iran-linked entities. FTO designations are made by the U.S. Department of State, rather than OFAC, and operate under a separate legal framework that is not expressly covered by GL X. We emphasize that it would be important to conduct enhanced diligence to understand transaction counterparties and any direct or indirect involvement of designated terrorist organizations in the underlying activity.
We are closely monitoring this area and will update this post as developments emerge.
Key takeaways
Overall, GL X provides a significant but temporary authorization for activities involving Iranian-origin oil and petroleum products, with important practical and legal implications. The short duration of the license places immediate pressure on execution timelines and transaction structuring.
The license also highlights the continued complexity of the Iran sanctions regime. While it authorizes a wide range of operational activities, it does not fully resolve questions arising under overlapping legal frameworks, including counterterrorism statutes and asset attachment risks. As a result, parties seeking to rely on GL X should ensure that their compliance approach incorporates robust diligence, careful structuring and a holistic assessment of legal risk.
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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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