Oil extended its slide on Wednesday after Washington cleared the way for Iran to start selling its crude on the open market again. WTI traded near $71 a barrel and Brent near $74.60, both down about 3% on the day and both at their weakest levels in nearly three months.
The trigger was a piece of paper. On Monday the US Treasury issued a temporary 60-day license that lets Iran pump, ship and sell its crude again, plus petrochemicals and refined fuels. The waiver runs through August 21. American buyers can even bring the barrels home, though anything tied to North Korea, Cuba or Russian-held Ukraine stays off limits.
Treasury Secretary Scott Bessent tied the move to promises Tehran has already kept: open passage for ships through the Strait of Hormuz, and UN nuclear inspectors allowed back into the country. He framed the license as one piece of the broader deal both sides signed up to, written into the 60-day memorandum Washington and Tehran sealed on June 17, which obliges Treasury to keep clearing Iranian crude exports until a final agreement lands.
Why traders sold
The license, formally General License X, does something the ceasefire alone could not. It puts Iranian barrels back on the books with a legal stamp and, for the first time in over forty years, clears them to change hands in dollars. China already buys close to 90% of what Iran ships, but licensed, above-board sales make it far easier for those cargoes, and the banks behind them, to move without the usual sanctions friction.
The scale is real. Around 67 million barrels of Iranian oil have been sitting idle on tankers in the Gulf, and freeing them could hand Tehran $8 billion to $9 billion, by the estimate of Miad Maleki, who once ran sanctions cases at the US Treasury.
Markets read it instantly. Brent fell more than 3.5% the day the waiver landed and crude has leaked lower since. That caps a stunning round trip. WTI was changing hands above $100 in the middle of May, when the Strait of Hormuz was still shut and US pump prices were racing toward $5 a gallon. It has since shed close to 30%.
A floor, not a free fall
Prices are not collapsing, though. The first tankers are only now threading back through Hormuz, and the physical market stays tight after months of disruption. War-risk cover is still brutal, which is part of why crude has stalled in the low-to-mid $70s instead of sinking back to pre-war levels. We looked at how the insurance bill alone is worth several dollars a barrel, and at the roughly 500 tankers that still cannot clear the strait overnight.
So the paper supply is back before the real supply is. That gap is what keeps a bid under the market even on a down day.
What August brings
The bigger question is what happens after the license expires. Negotiators sat down for a first round in Switzerland the same day the waiver appeared, and Qatar and Pakistan, the governments brokering between them, say the two sides have sketched a path to a permanent deal before the 60 days run out. The hard part, Iran's nuclear program and whether the US lifts sanctions for good, is still ahead. Vice President JD Vance, part of the American side, said the two countries had "laid a very good foundation for a successful final deal."
If those talks stall, the waiver can lapse on August 21 and the barrels can disappear from the market as quickly as they came back. For now the signal is one-way. Every sign that Iranian oil is flowing again reads as lower prices, and traders are taking it at face value.