US loosens Iran oil sanctions amid progress in negotiations

The U.S. Treasury Department on June 23 issued a temporary 60-day license authorizing the production, transport, and sale of Iranian oil on the U.S. market. The move comes after 'promising' talks in Switzerland between Washington and Tehran aimed at reaching a comprehensive peace agreement.

The license falls under the framework of a 60-day memorandum of understanding (MoU) signed by the two sides on June 17. U.S. Treasury Secretary Scott Bessent said the negotiations had yielded 'positive' results and that many terms of the MoU were being implemented.

'Iran has committed to ensuring free and uninterrupted passage through the Strait of Hormuz, and to allowing inspectors from the International Atomic Energy Agency (IAEA) into the country,' Bessent wrote on social media. 'Under the framework, the Treasury has issued a temporary 60-day license authorizing the production, transport, and sale of Iranian oil.'

The license is valid until August 21 and covers crude oil, petrochemical products, and petroleum products of Iranian origin. It allows imports of Iranian oil into the United States but does not authorize transactions involving North Korea, Cuba, or the Russian-occupied regions of Ukraine that are under U.S. sanctions.

Following the announcement, Brent crude fell more than 3.5% to $77.7 per barrel. There has been no official response from Iran so far.

'Good foundation'

U.S. Vice President JD Vance, who is at the Burgenstock resort in Switzerland for the talks, expressed optimism about the progress. 'We have laid a very good foundation for a successful final agreement,' he told reporters.

Vance dismissed the social-media tensions between President Donald Trump and Iran's top negotiator Mohammad Bagher Ghalibaf. 'The threats on social media that they would walk away from the table did not materialize… At the end of the talks, we made significant progress.'

Mediators said Washington and Tehran had made 'promising progress' during the first round of talks. Vice President Vance did not give a specific timeline for nuclear inspections, but said exchanges with the IAEA could take place as early as June 23.

The United States says preventing Iran from developing nuclear weapons is the main driver, and it demands that Tehran reopen its nuclear facilities to international monitoring. Iran denies the allegations and insists its nuclear program is solely for civilian purposes.

Strait of Hormuz buzzing again

Before the license announcement, the Strait of Hormuz saw increased traffic of oil and gas tankers. Four LNG tankers under Qatari control entered the Persian Gulf through the strait, along with two very large crude carriers (VLCCs) with a combined capacity of up to 4 million barrels of crude oil. Two smaller tankers carrying nearly 2 million barrels of oil left the strait for the Gulf of Oman.

Shipbroker Clarksons noted: 'Daily transit volumes remain below the 125 movements seen before the conflict, but the trend is positive.' The United States insists the strait has never been closed a second time, recording 55 commercial vessels passing through on June 22 carrying more than 17 million barrels of oil.