Oil prices continued to drop Tuesday, the day after the United States issued a 60-day license allowing Iran to sell oil on the global market for the first time since 2018. The Trump administration has also authorized Iran to sell that oil for dollars, a decision that upends decades of U.S. policy meant to squeeze Iran economically and prevent it from developing its nuclear program.
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Under U.S. sanctions, Iran in recent years has used a “shadow fleet” to export oil. It’s also sold 1.4 million barrels, with almost 90% going to China and most at a discount to global prices due to the risk to buyers.
Now Iran can sell oil on the open market, receive higher prices and be paid in dollars. It could be an enormous economic boon for the country and provide billions of dollars to the regime. Iran is looking to sell that oil in Asia, but Bloomberg reported that many buyers are hesitating, whether it’s because they have found alternative sources, are worried about the reliability of Iranian oil (the license is only for 60 days) or fear the administration’s wild swings from one policy to another.
Recall that it was only two months ago that the U.S. increased sanctions on Iran’s financial institutions. “Iran’s shadow banking system serves as a critical financial lifeline for its armed forces, enabling activities that disrupt global trade and fuel violence across the Middle East,” Treasury Secretary Scott Bessent said in a statement at the time. “Illicit funds funneled through this network support the regime’s ongoing terrorist operations, posing a direct threat to U.S. personnel, regional allies, and the global economy.”
Now, as part of sanctions relief, Iranian banks can receive direct payment from foreign banks and financial institutions.
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