US to immediately allow Iranian oil sales under deal to end conflict

The United States will immediately allow Iran to resume selling oil and fuel under a memorandum of understanding expected to be signed this week, marking a significant easing of sanctions as part of a deal aimed at ending months of conflict, Reuters reported, citing a senior US official.

The sanctions waiver will take effect once the agreement is formally signed and will extend beyond oil exports to include banking, transportation and insurance services needed to facilitate Iranian energy sales, the report said.

The move could provide Tehran with access to billions of dollars in revenue and potentially return substantial volumes of Iranian crude to global markets after months of disruption linked to fighting in West Asia and restrictions on shipping through the Strait of Hormuz.

Sanctions relief tied to conditions

The report said that the sanctions relief would be conditional on Iran meeting its commitments under the agreement.

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“This is a performance-based agreement,” the official told Reuters. “Iran can only access any benefits of the MOU if they abide by all of the points they agreed to – including no nuclear weapon, neutralising its enriched material, and not interfering with the free flow of navigation in the Strait of Hormuz.”

The Trump administration had reimposed sweeping sanctions on Iran in 2018 over concerns about Tehran’s nuclear programme and its support for armed groups across the region. Iran has consistently maintained that its nuclear activities are intended solely for civilian purposes.

The agreement represents a major shift in US policy towards Iran and could have significant implications for global energy markets.

Strait of Hormuz tensions

The development follows months of heightened tensions in West Asia. The United States and Israel launched military strikes against Iran on February 28, after which Tehran effectively shut the Strait of Hormuz, one of the world’s most critical energy chokepoints.

Roughly 20 per cent of global oil and liquefied natural gas shipments normally pass through the narrow waterway, making any disruption a major concern for energy-importing countries and global markets.

Draft agreement outlines broader sanctions rollback

A senior Iranian official told Reuters on Sunday that the final draft of the memorandum includes a temporary waiver of US oil sanctions, allowing Iran to sell crude and receive revenue during a specified period.

The draft also envisages a broader rollback of sanctions. According to the Iranian official, all US and United Nations sanctions on Iran would eventually be lifted under an agreed timetable following a final settlement.