The US will allow unlimited sales of Iranian crude, refined and other petrochemical products until 21 August, in another concrete step toward implementing the US-Iran deal signed on 18 June.
Buyers can pay in US dollars for the Iranian oil, freight services and insurance, according to the terms of a general license issued on Monday by the Treasury Department's sanctions enforcement arm, the Office of Foreign Assets Control (OFAC).
The OFAC license follows a round of direct US-Iranian talks in Switzerland on Sunday, which made \"very good progress\", according to US vice president JD Vance, who led the US delegation. The length of the sanctions waivers matches the 60 day period set by the US-Iran \"memorandum of understanding\" to complete negotiations on Iran's nuclear program, the status of the strait of Hormuz and other issues.
The US-Iran interim deal allows for an extension of negotiations beyond the 60 day period, which could also result in another extension of the Iran sanctions waivers. Conversely, a breakdown in the US-Iran relations could result in the waiver being terminated ahead of the deadline.
The OFAC license spells out in great detail all transactions associated with the sale, transportation and offloading of Iranian crude and products and allows shipping Iranian oil on tankers that are on the US sanctions list. It does not lift sanctions on the Iranian sellers, but waives the application of sanctions on the buyers.
The license allows the provision of services for transporting Iranian oil, including \"vessel management, crewing, bunkering, piloting, registration, flagging, insurance, classification and salvage\".
The OFAC license even allows imports of Iranian oil into the US, for subsequent trans-shipment.
Before the war, most Iranian crude went to a narrow group of customers in China's independent refining industry who appeared to be unbothered by the effect of US sanctions. With waivers in place, China's state-controlled companies and buyers in India and other countries in Asia could be motivated to buy Iranian crude.
For now, even lower prices in the past week have not spurred buying interest from the Chinese companies.
Many buyers likely will remain wary of taking advantage of the availability of Iranian crude and products, due to the 60 day term of the sanctions waiver and the possibility that confrontation between the two countries could flare up again, resulting in the snapback of sanctions.