The United States Treasury Department announced Monday a temporary 60-day general license authorizing the Islamic Republic to produce, deliver, and sell crude oil, permitting US imports of Iranian crude oil and petroleum products until August 21, 2026. This authorization, described by an Israeli academic as a “cold cost-benefit calculation” by Washington, was issued while transactions involving North Korea, Cuba, and Russian-occupied Ukraine remain subject to US sanctions.
Treasury Secretary Scott Bessent stated on X/Twitter that the authorization was “in line with the ongoing productive talks in Switzerland,” and that Iran had “committed to free and open transit in the Strait of Hormuz and to permit International Atomic Energy Agency (IAEA) inspectors into their country.” He reiterated that “as part of the framework, the treasury has issued a temporary 60-day general license authorizing the production, delivery, and sale of Iranian oil.”
Shahar Golomb, a lecturer in economics and finance at the Afeka Academic College of Engineering, conveyed to The Jerusalem Post that it was premature to fully assess the implications of the two-month reprieve. Golomb highlighted a “real risk that the Iranian regime will use part of these funds to rebuild or strengthen its military and regional capabilities.”
Golomb further elaborated that “The US administration appears to have made a cold cost-benefit calculation: allowing a temporary reprieve may be less costly than prolonging a conflict that could destabilize energy markets, push oil prices sharply higher, and create broader risks for the global economy.” He concluded that this move was “not necessarily a vote of confidence in Iran, but rather a pragmatic attempt to reduce the immediate economic and geopolitical damage.”
US Economic Interests
The immediate impact of the authorization was observed in the global market, with oil prices falling on Tuesday. Brent crude futures decreased by 44 cents, or 0.6%, to $77.46 a barrel. US West Texas Intermediate (WTI) crude was also down 30 cents, or 0.4%, reaching $73.56 a barrel at 8:13 a.m. GMT.
Government data released on Monday indicated that US crude stocks in the Strategic Petroleum Reserve fell to 331.2 million barrels last week, marking the lowest level since June 1983. This decline occurred as supplies tightened following a three-month-long closure of the Strait of Hormuz.
The Strait of Hormuz Blockade
Prior to the three-month closure of the Strait of Hormuz, the Islamic Republic had the capacity to export more than 1.5 million barrels of oil daily. Following the blockade, Iran’s daily oil exports significantly declined to a range of 209,000 to 260,000 barrels.
The maritime intelligence firm TankerTrackers reported that Iran has exported approximately 36 million barrels of crude oil since June 15. The firm also stated on Friday that the Islamic Republic had exported $1.44 billion in crude oil in that week alone.