United States Eases Sanctions on Iranian Petroleum Trade – Key Implications

Introduction

On 21 June 2026, the U.S. Office of Foreign Assets Control ("OFAC") issued General Licence X ("GL X"), authorising certain transactions involving Iranian-origin crude oil, petroleum products and petrochemicals. The licence represents a significant, albeit temporary, relaxation of aspects of the U.S. sanctions regime relating to the Iranian petroleum sector.

However, EU and UK sanctions remain materially different in several respects, creating potential compliance challenges for shipowners, charterers, insurers and other maritime stakeholders. 

Key takeaways for Members 

• Broad U.S. authorisation (time-limited): GL X permits transactions ordinarily incident and necessary to the production, sale, transport and discharge of Iranian petroleum products, including related maritime and insurance services. Members should note that GL X may be amended, extended or revoked by OFAC. Parties involved in transactions relying upon the licence should continue to monitor developments throughout its duration.
• Material limitations remain: The licence is confined to the petroleum sector, excludes certain jurisdictions, and does not permit dealings involving prohibited parties designated under Executive Orders not listed in the licence.
• EU prohibitions continue to apply: EU sanctions continue to prohibit the purchase, transport and insurance of Iranian-origin oil, irrespective of destination.
• UK regime remains designation-based: The UK continues to impose asset freezes on Iranian persons/entities, although it does not currently impose a comprehensive prohibition on Iranian oil trade itself.
• Lawful trade may still result in uninsured exposure: Members should not assume that a transaction which is permissible under applicable UK sanctions laws will necessarily be free from significant insurance or financial risk. Even where a transaction involving Iranian-origin oil is permissible under applicable UK sanctions laws (for example because no designated person or entity is involved), sanctions restrictions affecting the International Group pooling arrangements, EU-based pooling partners or reinsurers may, in the event of a substantial claim, prevent or restrict the recovery of contributions that would otherwise be available. Any shortfall arising as a result of such unrecoverable contributions would fall outside Club cover pursuant to Rule 5V and would remain for the account of the Member concerned.

• Heightened multi-jurisdictional risk: Members may be exposed to conflicting U.S., EU and UK sanctions regimes, particularly where an EU nexus (e.g. insurers, financing or ownership) is present. Members should carefully consider both sanctions compliance risks and the potential impact of differing sanctions regimes on insurance arrangements and the availability of financial support in the event of a claim.

 Conclusion:

GL X temporarily authorises certain activities involving Iranian petroleum trade under U.S. law. However, significant sanctions restrictions continue to apply under EU and UK regimes and Members should carefully assess the legal, compliance and insurance risks arising from any proposed transaction. In particular, a transaction may be lawful under one sanctions regime but nevertheless give rise to insurance recovery issues if sanctions restrictions prevent or restrict the recovery of amounts that would otherwise be available from the International Group Pool.

Members are reminded that cover is not available for any trade that breaches applicable sanctions and are advised to conduct thorough due diligence on the parties, cargoes, vessels and other service providers that are or may be involved before engaging in any trade with a high sanctions risk, maintaining appropriate records of their due diligence investigations and findings. 

Given the potential application of multiple sanctions regimes, Members should carefully assess the legal, compliance and insurance implications of any proposed transaction and consider obtaining specific legal advice where appropriate.

The above is provided for general informational purposes only and does not constitute legal advice.   

 

Members requiring further information should contact their usual Club representative.