- within Government and Public Sector topic(s)
- within Wealth Management, Technology and Employment and HR topic(s)
- with Inhouse Counsel
Overview
On July 7, 2026, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) revoked Iran General License X (GL X) and issued Iran General License X1 (GL X1), titled Revocation and Wind Down of June 21, 2026 Authorization for the Production, Delivery and Sale of Crude Oil, Petrochemical Products, and Petroleum Products of Iranian Origin. GL X1 became effective immediately and provides that GL X is revoked and superseded in its entirety.
As discussed in our prior post on June 23, 2026, GL X authorized a broad range of transactions ordinarily incident and necessary to the production, sale, delivery, and offloading of Iranian-origin crude oil, petrochemical products, and petroleum products through August 21, 2026. GL X1 replaces that authorization with a substantially narrower license limited to the wind down of transactions previously authorized under GL X.
As of the publication of this post, neither OFAC nor other U.S. government agencies have provided further guidance regarding this development. We are closely monitoring updates in this area.
Scope of GL X1
GL X1 authorizes transactions that are “ordinarily incident and necessary” to the wind down of transactions previously authorized by GL X through 12:01 a.m. EDT on July 17, 2026.
Importantly, GL X1 expressly provides that, except to the extent necessary for such wind-down activity, it does not authorize any new transactions, including purchases or loading of Iranian-origin crude oil, petrochemical products, or petroleum products on or after July 7, 2026.
Payment restrictions
GL X1 also significantly changes the treatment of payments associated with authorized activity.
Under GL X, payments owed to Iran, the Government of Iran, or blocked persons in connection with authorized transactions involving Iranian-origin crude oil, petrochemical products, and petroleum products could be made in U.S. dollar-denominated funds. That authorization has now been removed. Instead, GL X1 requires that any payment to a blocked person be deposited into a blocked, interest-bearing account located in the United States.
Key takeaways
GL X1 represents a significant narrowing of the sanctions relief introduced by OFAC less than three weeks ago. Rather than authorizing the production, sale, delivery, and offloading of Iranian-origin crude oil, petrochemical products, and petroleum products through August 21, 2026, GL X1 is limited to activities necessary to wind down transactions previously authorized by GL X through July 17, 2026.
The license also expressly prohibits new purchases and loadings on or after July 7, 2026, except as necessary for authorized wind-down activity, and imposes more restrictive payment requirements for dealings involving blocked persons.
Parties that had been contemplating or conducting activity pursuant to GL X should promptly assess their transactions, contractual commitments, and compliance obligations in light of the limited wind-down period provided by GL X1. We are happy to discuss specific operations/transactions in further detail.
We note that this situation continues to rapidly develop and we will update this post as further guidance and developments emerge.
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.
[View Source]
