Trump deal gives Iran access to US dollar: What to know |
Trump deal gives Iran access to US dollar: What to know
The Trump administration this week signaled progress in its negotiations with Iran over reopening the Strait of Hormuz and reforming its nuclear program by rolling back longstanding sanctions on Iranian oil exports.
Under a 60-day license issued by the Treasury Department on Monday, Iran can now sell oil in U.S. dollars, allowing dollar-denominated trade on crude oil, petrochemical and petroleum products through Aug. 21.
The move is part of a broader ceasefire deal that will likely include the reopening of the critical shipping corridor, which Iran announced it would close again citing ceasefire violations tied to Israel launching deadly strikes in Lebanon. The strait’s closure has disrupted global oil supply and caused gasoline prices to surge.
The so-called “General License X” also permits Iranian oil imports into the United States and allows transactions from vessels and entities that were previously blocked by prior U.S. sanctions.
For decades, the U.S. used its oil sanctions on Iran to cripple its economy by cutting it off from the dollar-based financial system. Iran has since relied on a “shadow network” to continue exporting oil — primarily to China, which purchases roughly 90 percent of Iranian oil exports — and often relied on alternative currencies and other workarounds to avoid sanctions restrictions, according to The Wall Street........