OFAC

The Office of Foreign Assets Control (OFAC) is a financial intelligence and enforcement agency of the US Department of the Treasury. It administers and enforces economic and trade sanctions against foreign governments, entities, and individuals based on US Foreign Policy and national security goals. OFAC maintains the Specially Designated Nationals (SDN) list, which freezes the US-based assets of listed parties and prohibits Americans from doing business with them. It also issues general licences (GLs) that create temporary legal carve-outs allowing otherwise-prohibited transactions to proceed.

In the context of the 2026 Iran conflict, OFAC's General Licence U (GL-U) became a critical instrument. GL-U provided the legal basis for up to 128 million barrels of Iranian crude already in transit or at loading ports to reach buyers without triggering US sanctions violations. That licence was set to expire on 19 April 2026, creating a hard deadline for diplomatic resolution or extension. Without renewal, buyers and intermediaries holding that crude would face instant sanctions exposure, triggering fire-sale pressure on Iranian oil and spiking Brent further.

OFAC functions as both a coercive tool and a pressure-release valve in US Foreign Policy: by granting, extending, or revoking licences, the Treasury can calibrate economic pain on adversaries without kinetic action. During the Iran crisis, the GL-U expiry date was widely read as a deliberate negotiating deadline, giving Washington a non-military lever to accelerate Ceasefire talks while maintaining maximum economic pressure if talks stalled.