Diverging approaches to Iranian sanctions as the US grants limited relief, while UK and EU measures remain in place

On 21st June, 2026, the US Office of Foreign Assets Control (“OFAC”) issued General License X (“GLX”), described as “Authorizing the Production, Delivery and Sale of Crude Oil, Petrochemical Products, and Petroleum Products of Iranian-Origin through August 21, 2026”.

This is a significant development considering the longstanding US sanctions against Iran, which have restricted such activities for many years. GLX was issued following the signing of a Memorandum of Understanding between the US and Iran. Under the memorandum, and subject to reaching a final agreement (within 60 days, extendable by mutual consent), the US undertook to terminate "all types of sanctions" against Iran, in an "agreed upon schedule" as part of the final agreement.

Pending the termination of sanctions, the US also agreed to issue waivers for the export of Iranian crude oil, petroleum products and derivatives, together with associated services including banking, financial transactions, insurance and transportation. As such, apart from the activities authorised by GLX, all other US sanctions against Iran currently remain in place.

GLX is relatively broad in scope. Subject to certain exceptions discussed further below, it authorises the following activities until 21st August, 2026 (unless withdrawn or amended beforehand):

• All transactions ordinarily incident and necessary to the production, sale, delivery, or offloading of crude oil, petrochemical products, or petroleum products of Iranian origin, including transactions involving ships blocked by US measures.
• Related maritime services and insurance.
• The importation into the US of crude oil, petrochemical products and petroleum products of Iranian origin, where such importation is ordinarily incident and necessary to the sale, delivery, or offloading of such crude oil, petrochemical products, or petroleum products authorised by GLX.
• Payment of funds owed to Iran, the Government of Iran, or any blocked person for activities authorised by GLX may be made in US dollar-denominated funds.

GLX does not, however, apply to:

• Any transactions involving persons or entities in North Korea, Cuba, Crimea, or certain occupied regions of Ukraine, including companies owned or controlled by, or operating in joint venture with, such persons/entities.
• Any activity that remains prohibited under other US sanctions programmes or regulations that are not specifically covered by GLX.
• Crucially, the wide-ranging EU and UK measures targeting Iran remain in place. Accordingly, a transaction which may on its face fall within the scope of GLX, could nevertheless be caught by EU or UK sanctions where there is a relevant EU or UK jurisdictional nexus. For example, this may arise where an insurer, bank or other participant involved in the transaction is subject to EU or UK jurisdiction.

Conclusion

In summary, although GLX represents a significant change to the US sanctions regime against Iran, the relief provided is temporary, limited in scope and subject to important exceptions. Moreover, GLX does not override or affect other sanctions regimes. The EU and UK sanctions against Iran therefore remain fully in force.

Members with questions regarding the issues discussed above are invited to contact the Club for further information.