OFAC Issues General License X1, Withdrawing General License X's Grant of Broad Sanctions Relief on Iran's Oil and Petroleum Sector

The temporary trade opportunity created on June 22, 2026 by issuance of Iran General License X (GLX) by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has vanished as abruptly as it appeared. On July 7, 2026, OFAC issued General License X1 (GLX1), which revokes and supersedes GLX. By its terms, GLX would have been in effect through August 21, 2026. GLX, issued during a transient amelioration of the relations between the United States and Iran, authorized certain transactions involving Iranian-origin crude oil, petrochemical products, and petroleum products. See GLX1 withdraws that authorization, and only allows transactions that are “ordinarily incident and necessary” to the wind-down of transactions previously authorized by GLX. Accordingly, as of July 7, 2026, new transactions, including new purchases or loadings of Iranian-origin crude oil, petrochemical products, or petroleum products, are no longer authorized. The payment provisions have also changed. GLX permitted U.S. dollar payments to Iran, the Government of Iran, or “blocked” persons ( i.e. , Specially Designated Nationals) in connection with authorized transactions. GLX1 now provides that any such payment must be made into a blocked, interest-bearing account located in the United States. Blocked funds can only be released pursuant to an OFAC license. The ongoing volatility in the region is reflected in the ever-changing regulatory environment, creating complex compliance challenges. Katten stands ready to assist as needed.