On 21 June 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued General License X (“GL X”), authorising certain transactions relating to the production, sale, delivery and offloading of Iranian-origin crude oil, petrochemical products and petroleum products. This represents a remarkable — if temporary — departure from the comprehensive United States sanctions framework that has constrained Iranian energy trade for decades. Clients need to be aware that there are still significant Iranian sanctions restrictions in place by the European Union and the United Kingdom, that may still prevent parties from taking advantage of GL X. This alert summarises the key features of GL X and the practical considerations for clients.

Overview of the General Licence

Scope and authorised activities. GL X authorises all transactions ordinarily incident and necessary to the production, sale, delivery or offloading of Iranian-origin crude oil, petrochemical products and petroleum products, including transactions involving vessels blocked under the relevant authorities. Covered ancillary activities expressly include safe docking and anchoring; crew health and safety; emergency repairs; environmental mitigation; vessel management, crewing, bunkering, piloting, registration, flagging, insurance, classification and salvage.

Importation into the United States. Notably, GL X extends to the importation into the United States of Iranian-origin petroleum products where such importation is ordinarily incident and necessary to the authorised sale, delivery or offloading.

Payments. Payments owed to Iran, the Government of Iran or any blocked person for the purchase of authorised products may be made in U.S. dollar-denominated funds.

Key exclusions and limitations. GL X does not authorise transactions involving persons located in, or organised under the laws of, North Korea, Cuba, the Covered Regions of Ukraine (as defined by Executive Order (“EO”) 14065), or the Crimea Region of Ukraine (as defined by EO 13685). It does not authorise any transactions prohibited by Executive Orders or regulations not expressly referenced in the licence. Clients should note that this is not a wholesale lifting of Iran sanctions; it is a targeted, time-limited authorisation confined to the petroleum sector.

Who may rely on it. GL X is issued under multiple sanctions programmes (including 31 CFR parts 560, 544, 561, 562, 587, 589 and 594, and Executive Orders 13846, 13876, 13902 and 13949). Any U.S. person, and any non-U.S. person complying with the terms and conditions of GL X, may rely on the licence to the extent the transaction falls within its terms.

Non-US clients should independently assess:

• the feasibility of banking, insurance and logistics arrangements; and any applicable EU, UK or other local sanctions regimes which may not provide equivalent relief;
• contractual restrictions (including sanctions-related representations and warranties).

Duration and expiry

GL X expires at 12:01 a.m. Eastern Daylight Time on 21 August 2026. There is no automatic renewal, and the license can be withdrawn at any time before then. Clients engaged in transactions authorised by the licence must plan for wind-down well in advance of this deadline. Any transaction not completed by that time will no longer benefit from the authorisation and could give rise to sanctions liability.

We recommend that clients monitor OFAC guidance closely for any extension, amendment or revocation and ensure that contractual arrangements incorporate appropriate conditionality linked to the licence’s validity.

Conclusion — a remarkable turnaround

The issuance of GL X is extraordinary by any measure. For the first time in over a decade, OFAC has authorised — albeit temporarily — the broad production, sale and delivery of Iranian-origin petroleum products, including their importation into the United States and payment in U.S. dollars. This marks a significant, if carefully circumscribed, easing of the maximum-pressure posture that has defined U.S. Iran sanctions policy in recent years.

Clients should approach this development with both commercial interest and caution. The licence is temporary, narrowly drawn and subject to exclusions. The broader sanctions architecture remains in place. Parties contemplating reliance on GL X should conduct thorough due diligence, take specialist legal advice and ensure robust compliance frameworks are in place to manage the residual risks that attend any dealings with Iranian-origin products, particularly if they have an EU or UK nexus.

The Reed Smith sanctions team is available to assist clients in assessing the implications of GL X for their operations and to advise on structuring compliant transactions within its scope.