In a truly spectacular move to bring down the price for crude and petroleum products, the US OFAC issued general license U lifting the US sanctions on any transactions with seaborne crude and petroleum products of Iranian origin for the period until 19 April 2026. The license formally applies only to the commodity which was loaded on a vessel as of 20 March 2026, but in practice is likely to have wider ramifications increasing trade in any Iranian crude and petroleum products.
On its face, the move is similar to the temporary lifting of the US sanctions with respect to Russian crude and petroleum products which occurred earlier this month (see our post on this matter).
Yet, there are certain elements which make this step of the Trump’s Administration truly important to understand how national economic sanctions work.
The starting issue is that (with the exception of North Korea, Cuba, and certain regions of Ukraine) Iranian crude and petroleum products may now be sold to any country, including the US itself. At the time when the US is leading a war against Iran, the willingness to buy Iranian oil is a point to note in itself.
The second point is that, unlike sanctions against Russia, the US position is formally that the UN sanctions against Iran have been reinstated (see our video on the “snapback” of the UN sanctions against Iran). The UN sanctions, among other matters, restrict trade in Iranian crude and/or petroleum products and dealing with Iranian companies involved in the production and sale of this commodities. The US, certainly, did not attempt to seek temporary lifting of the UN sanctions prior to granting its own relief. Accordingly, not only the US is willing to bring to the market the crude and petroleum products of the country with which it is at war, but it is also pursuing these steps in breach of the UN sanctions which it formally supported less than six months ago.
Final feature of this step to consider is the apparent absence of any co-ordination of the US in their sanctions’ politics with the EU partners which, being net importers of crude/petroleum products, suffer much more than US (which is a net exporter) from increased oil prices. This is a good example to understand how co-ordination of national sanctions operates in real life and when it matters between the US and the EU. To put it the other way – one could hardly even imagine a similar step in the EU sanctions’ politics without prior co-ordination with the US.
These elements make (one may say – yet another) a strong case that national sanctions is not a legal, but a political instrument and, at least in its extreme manifestation where sanctions against Iran are one of examples, is a form of pressure coming very closely to military action.