On Monday, US Treasury Secretary Scott Besent announced the issuance of a temporary general license for a period of 60 days, allowing the production, supply and sale of Iranian oil, within the framework of implementing the terms of the memorandum of understanding signed between Washington and Tehran to end the war between the two sides.
The US Treasury Department explained that the license includes the production, delivery and sale of crude oil and petroleum and petrochemical products of Iranian origin, and will continue until next August 21.
According to Bloomberg, temporarily lifting restrictions may open the door to buyers competing with China, which is the largest importer of Iranian oil. However, expanding the buyer base remains a complex task due to the continued European and British sanctions, difficulties in insuring shipments, in addition to the reluctance of some ports to receive tankers linked to what is known as the Iranian “shadow fleet.”
Some buyers also fear the volatility of the US position and the possibility that President Donald Trump’s administration will withdraw from the temporary exemption, which may confuse refineries that conclude contracts to buy Iranian oil.
The agency points out that supply and demand conditions are not entirely in Tehran’s interest, as Iran has about 68 million barrels stored at sea on ships, while it faces competition from Russian and American oil and Middle Eastern exports, which have begun to recover.
As for China, the traditional buyer of Iranian oil, its government refineries may benefit from the US exemption, but private sector refineries, which consume the largest share of Iranian oil, are currently operating at their lowest levels in 9 years.
India may be among the potential buyers if it obtains discounted prices, given its proximity to the Gulf region and the speed with which shipments arrive there, while South Korea may also be included in the list of buyers.
In the same context, Reuters reported that tankers linked to Iran continued to cross the Strait of Hormuz, with navigation traffic improving on Monday in conjunction with the progress of the US-Iranian talks.
The movement of flows had declined before the talks, amid threats from Trump to resume the war and Tehran’s announcement to close the strait again.
The first round of talks ended with the two parties agreeing on a road map to reach a permanent agreement within 60 days.
Reuters quoted analysts as expecting the exit of more oil shipments that have been disrupted in the Gulf since the outbreak of the war, with an increase in the entry of sanctioned tankers to load and export Iranian oil after the suspension of US sanctions.
Analyst Oli Hvalby said that Venezuelan, Russian, and now Iranian oil has become available to anyone who wants to buy, indicating that countries may seek to boost their stocks.
He added that easing sanctions would not have a significant impact on prices in the short term, because the memorandum of understanding between Washington and Tehran is still new and fragile. (Al Jazeera)
