OFAC General License X1 – Revocation of General License X and Winding Down of Energy Sector Sanctions Relief

US revokes Iranian sanctions relief, replacing short-lived General License X with General License X1.

On July 7, 2026, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License X1, effectively reinstating all US sanctions against Iranian crude oil, petrochemical products, and petroleum products. 

As detailed in our recent alert, the US and Iran recently executed a Memorandum of Understanding (MOU) to end military operations and to set the framework for further negotiations to resolve the conflict. The MOU contemplated wholesale reform of the US sanctions regime against Iran and required the Department of the Treasury to immediately begin issuing waivers for the export of Iranian crude oil, petroleum products, and associated services. To that end, OFAC issued General License X, which temporarily authorized “all transactions” related to crude oil, petrochemical products, or petroleum products of Iranian origin. Although General License X provided substantial and legally significant relief for a critical segment of the Iranian energy sector, we noted in our related alert that its practical impact would be uncertain, particularly in light of the rapidly evolving geopolitical situation. 

Indeed, General License X’s reprieve appears to be short-lived. In the days following its release, both sides reportedly engaged in continued hostilities over the Strait of Hormuz. General License X1, apparently responding to these actions, revokes General License X and returns US sanctions on Iran to the status quo ante. Companies have until July 17, 2026, to complete or exit transactions previously authorized by General License X. General License X1 explicitly prohibits new transactions unrelated to the completion or termination of transactions previously authorized under General License X. 

General License X1 demonstrates the ongoing uncertainty with respect to US sanctions reform for Iran. We will continue to monitor developments and expect to publish additional insights on this topic in the coming days.