OFAC Authorizes Certain Iran Crude Oil and Petroleum Transactions but Questions Remain and EU and UK Sanctions Remain in Force

On June 22, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Iran-related General License X (GL X), authorizing otherwise-prohibited transactions ordinarily incident and necessary to the production, sale, delivery or offloading of crude oil, petrochemical products or petroleum products of Iranian origin. The authorization remains in effect through 12:01 a.m. EDT on August 21, 2026.

However, despite GL X, risks may remain for companies engaging in these transactions. While GL X addresses a lengthy list of sanctions regulations and authorities, that list is not comprehensive. Further, U.S. anti-terrorism statutes remain in place, and the Islamic Revolutionary Guard Corps (IRGC) and affiliated groups, such as the Qods Force, remain designated as Foreign Terrorist Organizations (FTOs). In addition, other Iran sanctions regimes such as those in the EU and UK are still in force and would require adjustment to align with GL X.

Background
The issuance of GL X follows the execution by the United States and Iran of a June 17, 2026, interim Memorandum of Understanding (MoU), which calls for the termination of military operations on all fronts and establishes a framework for discussions regarding broader sanctions relief and the reopening of the Strait of Hormuz, among other issues. Public reporting indicates that the MoU contemplates a 60-day negotiation period toward a broader agreement. The issuance of GL X closely follows the execution of the MoU and reflects a limited easing of certain U.S. restrictions on trade during that period.

Scope
GL X authorizes “transactions ordinarily incident and necessary to the production, sale, delivery, or offloading” of crude oil, petrochemical products or petroleum products of Iranian origin. Authorized activities include the safe docking and anchoring of vessels carrying such products; measures necessary to preserve crew health and safety; emergency repairs and environmental mitigation; and related maritime services, including vessel management, crewing, bunkering, piloting, registration, flagging, insurance, classification and salvage.

The general license also authorizes the importation of covered products into the United States where ordinarily incident and necessary to an authorized sale, delivery or offloading transaction.

Notably, although GL X references “production,” the scope of that term and implication for upstream activity is not defined. It is not yet clear whether GL X will have comparable reach as licenses granted for extraction and production activities in Venezuela. Further, GL X does not directly address Iranian tolls in the Straits of Hormuz, which U.S. officials continue to oppose and the MoU formally precludes within the first 60 days. Additional guidance from OFAC may be necessary to clarify the extent to which these activities are covered.

Limitations
GL X is subject to several important limitations.

First, it does not authorize any transaction involving persons from other embargoed jurisdictions, including North Korea, Cuba and occupied regions of Ukraine, or any entity owned or controlled by, or operating in a joint venture with, such persons.

Second, although payment for purchases of Iranian-origin crude oil, petrochemical products or petroleum products authorized by the general license may be made in U.S. dollar-denominated funds, the authorization is limited to payments owed to Iran, the Government of Iran or a blocked person in connection with authorized purchases.

Moreover, the broader U.S. sanctions and anti-terrorism framework remains in place, and as of this writing the IRGC and Qods Force are still designated by the U.S. State Department as FTOs. As a result, companies engaging in transactions with Iran that implicate an FTO remain exposed to both criminal prosecution under the material support statutes and civil liability under the ATA. Specifically, 18 U.S.C. § 2339B can create criminal liability for providing material support or resources to a FTO. Additionally, companies could face civil liability under the Anti-Terrorism Act, 18 U.S.C. 2333 (ATA), among other statutes. The ATA creates a civil cause of action for any U.S. victim of an act of international terrorism against “any person who aids and abets” or “conspires” with an FTO to commit such acts. Companies would need to consider the risk that activities permitted under GL X could give rise to secondary liability under the ATA, for example when funds flow to an FTO. Notably, the FTO designation carries a measure of extraterritoriality beyond other sanctions authorities, meaning that even non-U.S. persons may face exposure where there is a sufficient jurisdictional nexus.

Parties should therefore not assume that the interim MoU itself authorizes transactions or addresses U.S. laws or regulations beyond those expressly covered by GL X. Since GL X does not authorize any transactions or activities otherwise prohibited by executive orders or OFAC sanctions not expressly referenced in the authorization, it remains essential to ensure ongoing compliance with broader legal regimes beyond those listed in GL X. The MoU is fundamentally a framework for further negotiations on a 60-day timeline, not a standalone authorization, and does not alter existing prohibitions on dealings with designated persons or entities outside the four corners of the license.

EU and UK Considerations
Companies should also be mindful that the U.S. authorization does not automatically affect sanctions regimes administered by other jurisdictions. In particular, transactions involving EU or UK touchpoints require separate analysis.

European Union
The EU sanctions framework relating to Iran remains highly restrictive. Among other measures, the EU prohibits the import, purchase and transport of Iranian-origin crude oil, petroleum products and natural gas, as well as related financial assistance and brokering services. Additional restrictions apply to the Iranian oil, gas and petrochemical sectors, including restrictions on certain equipment and technology, financing, tanker-related services, and the provision of vessels in specified circumstances.

The EU also maintains significant restrictions on transfers of funds involving Iran, banking relationships with Iranian financial institutions, and dealings with designated persons. A number of key players connected to the Iranian oil, gas and petrochemical sectors are subject to an EU asset freeze. As a result, such transactions involving Iran that have an EU nexus, including the involvement of EU financial institutions or euro-denominated payment flows processed via the EU, require careful review under applicable EU sanctions requirements.

Any comparable easing of EU restrictions would generally require legislative action at the EU level since there is no EU general license mechanism. At present, we are not aware of any announced EU proposal that would create relief comparable to that provided under GL X.

United Kingdom
The UK sanctions framework differs in several respects from the EU regime and does not include the same comprehensive restrictions on Iranian-origin oil transactions. Nevertheless, UK asset-freeze measures, trade restrictions and other sanctions requirements may still apply depending on the parties, goods, services and payment flows involved. Certain key Iranian parties, including IRGC and the National Iranian Oil Company (NIOC) also remain subject to an asset freeze. Accordingly, transactions involving a UK nexus should be assessed on a case-by-case basis to determine whether they can be structured in compliance with applicable UK sanctions requirements.

Looking Ahead
Additional guidance from OFAC may be issued in the coming days and weeks, and further developments may emerge as negotiations contemplated by the MoU continue. Companies considering transactions in reliance on GL X should carefully evaluate whether each aspect of a proposed transaction falls within the authorization, whether risks remain under other U.S. statutes or regulations, and should conduct a jurisdiction-specific sanctions analysis where EU, UK or other non-U.S. touchpoints are involved.

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