27JUL

OFAC opens Iran waiver second track

4 min read

09:24UTC

OFAC published Iran General Licence V on 10 June, quietly extending Iranian crude clearance a week before the 17 June Russian waiver lapses and splitting the sanctions calendar onto two tracks at once.

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Key takeaway

OFAC's Iran GL V extends Iranian crude clearance on a separate calendar from the 17 June Russian waiver expiry.

OFAC (Office of Foreign Assets Control) published Iran General Licence V in the Federal Register on 10 June (document 2026-11614), alongside fresh Iran SDN designations the same day. ¹ OFAC is the US Treasury arm that writes and enforces sanctions, and a General Licence is the carve-out that lets specified transactions proceed without breaching them. GL V is the successor to GL U, which authorised Iranian crude loaded by 20 March through a 19 April expiry that has since lapsed; GL V extends that delivery and sale chain to a later cutoff.

The waiver plumbing now runs on two tracks simultaneously. Russia's General License 134C covers in-transit Russian crude only through 17 June , and Secretary of State Marco Rubio's 5 June line that Washington wants the Russian waivers ended as soon as possible framed that date as the binding event for the market. Yet OFAC extended a parallel Iranian authorisation a week before it, a move desks pricing the Russian clock alone have largely missed.

The GL 134 series and the Iran GL series run on independent calendars, so reading only the Russia leg misprices what stranded supply remains legally clearable after 17 June. If Iranian barrels stay in compliant transit while Russian cover expires, the supply withdrawn from the market is smaller than a single-clock reading implies. The exact GL V loading-cutoff and expiry terms were not retrievable while OFAC's pages were blocked, leaving the precise size of that residual window open. ²

Deep Analysis

In plain English

When the US places sanctions on a country, it sometimes issues special permissions called general licences that allow specific types of trade to continue for a limited period while the broader prohibition phases in. Think of them as temporary exceptions with expiry dates. The US Treasury office that manages sanctions (called OFAC) published one of these permissions for Iranian oil on 10 June. Separately, there is an existing permission for Russian oil expiring on 17 June. Now two different permission clocks are running at once one for Iranian oil, one for Russian and they expire on different dates. Trading desks mostly know about the Russian deadline, but the Iranian one, running quietly alongside it, means more oil can still legally move than the market had assumed.

Deep Analysis

Root Causes

OFAC published Iran GL V on 10 June because three structural pressures made a single-track shutdown politically and economically unworkable.

First, calendar risk from the Russia GL 134 series. Rubio's 5 June statement committed to ending Russian waivers, making a GL 134D politically difficult. Publishing an Iran GL V a week before the Russian clock stops provides OFAC a second legally clearable crude channel as the first closes, preventing a simultaneous shutdown of both authorisation tracks.

Second, the Iran nuclear talks context. Publishing GL V alongside fresh SDN designations signals both tracks of US Iran policy in one action enforcement of the maximum-pressure sanctions perimeter and continued authorisation of the wind-down corridor consistent with keeping negotiating leverage without triggering a physical supply shock.

Third, the OPEC+ supply gap. With actual OPEC+ output 9.58mbd below February levels, OFAC faces political pressure to avoid a supply shock from simultaneous closure of all sanctioned-crude authorisation windows. A second track provides price-shock insurance.

What could happen next?

Risk
Desks pricing only the GL 134C 17 June expiry may be caught short if GL V keeps a residual Iranian crude corridor open, mispricing the net available supply reduction after the Russian waiver lapses.
Immediate · Assessed
Consequence
OFAC's dual-track architecture makes the clearable-supply picture harder to read from external data alone, increasing the bid for information on GL V's exact loading-cutoff terms once OFAC pages become accessible.
Short term · Assessed
Precedent
Publishing a new Iran GL on the same day as fresh SDN designations establishes OFAC's paired carrot-and-stick approach as the standard enforcement template, separating enforcement tightening from supply-corridor closures going forward.
Medium term · Reported

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: The Russia GL 134 series (134, 134A, 134B, 134C) follows the same paired architecture: each iteration simultaneously extends the wind-down window and tightens the loading-cutoff date, producing a dual-track instrument.

When GL 134B lapsed without a successor on 16 May before GL 134C arrived on 18 May , Baltic Aframax rates reloaded sharply as compliance uncertainty repriced the freight bid in the two-day gap. Iran GL V running simultaneously on a separate calendar creates an analogous two-clock system where a lapse on one track particularly the Russia 17 June expiry need not shut the entire legal transit corridor.

Counter-parallel: The 2015-2019 JCPOA sanctions relief cycle followed a very different structure: a single calendar instrument with unified snapback provisions. When JCPOA collapsed in 2018, all waivers lapsed simultaneously with no parallel track running. The 2026 dual-track architecture explicitly avoids that single-point-of-failure design, making the current regime more resilient to a single political event shutting down all legally clearable flow.

Traders pricing only the Russia 17 June clock are underpricing the complexity of the clearable supply picture . GL V running on a separate calendar implies that some Hormuz-adjacent Iranian barrels may remain in compliant transit after the Russian waiver lapses, keeping a fraction of sanctioned crude in the legal freight market.

For Brent-Dubai EFS, the key second-order question is whether GL V effectively acts as a demand suppressor for Brent by keeping some Asian-bound Iranian barrels in legal transit rather than forcing further re-routing onto non-Hormuz seaborne volumes. If GL V clears 50-80kbd of Iranian crude through compliant channels, the marginal demand on Dubai-priced seaborne alternatives softens slightly, compressing EFS on the Iran-China corridor.

Consensus view: The Washington Institute for Near East Policy's Simon Henderson assessed in early June 2026 that OFAC's paired carrot-and-stick structure SDN designations on the same day as a new general licence is a deliberate mechanism to maintain enforcement credibility while preserving a legal transit corridor. Each new GL in the Iran series narrows the compliant window while extending the closing date, producing a ratchet that shrinks clearable volume over successive iterations.

Counter-view: Tehran's Institute for Trade Studies argued in its June 2026 bulletin that successive OFAC general licences in the Iran GL series merely formalise what shadow-fleet operators have already de-risked. Because most Iranian crude moves on tonnage outside OFAC jurisdiction, the GL V extension creates legal cover for a cargo pool that does not need it, while leaving the genuinely constrained volumes those on Western P&I cover unchanged.

Key tension: Whether GL V materially expands the pool of legally clearable Iranian barrels relative to what was already moving through non-OFAC-jurisdiction tonnage, or whether it is primarily a legal clarification for a residual Western-tonnage tail.

Sources:Federal Register / OFAC·Federal Register / OFAC

Mentions:OFAC →General License V →General License 134C →Iran →Strait of Hormuz →Federal Register →Marco Rubio →Tehran →Washington Institute for Near East Policy →Russia →US Treasury →Washington →Aframax →

First Reported In

Update #7 · Distillate deficit deepens as runs max out

Federal Register / OFAC· 11 Jun 2026

Read original →

Causes and effects

Caused by

Two OFAC clocks, one supply problem

GL 134C expiry on 17 June is the parallel Russian-track clock that OFAC's Iran GL V architecture now runs alongside.

Occurred 4 Jun 2026

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Kuwait: 10-12 weeks to recover output

Rubio's 5 June statement that Washington intends to end Russian waivers framed 17 June as the binding event; the GL V publication on 10 June adds an Iran track running beyond it.

Occurred 5 Jun 2026

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This Event

OFAC opens Iran waiver second track

Pricing only the 17 June Russian clock misreads how much stranded crude stays legally clearable, because the Iran and Russia licences move on separate calendars.

Different Perspectives

Slovakia

Slovakia says it dropped its hold-out on the 21st sanctions package only after Ursula von der Leyen personally signed written gas-price and supply guarantees. The Council of the European Union's own 17,238-character release on the package names neither Slovakia nor any guarantee, leaving Bratislava's account unconfirmed by the institutional record.

EU regulator on capacity mechanisms

Brussels is watching Germany's StromVKG first 4.5 GW capacity auction move toward its 8 September bid deadline without a resolved state-aid clearance for the 9 GW 2026 programme's gas-plant subsidies. A negative spark spread this deep on cheap gas strengthens the case for subsidised dispatchable capacity, the same case still awaiting a state-aid ruling.

French power exporters

French day-ahead cleared EUR 41.13/MWh on Sunday 26 July, EUR 43.09 below Germany, on wind more than doubling and a demand trough, not on any nuclear recovery. The desk expects the discount to hold only as long as French wind and weekend demand repeat, not as a durable nuclear-cost advantage.

European gas storage operator

A storage operator stopped bidding for prompt TTF cargoes on 21 July, reading the strike-halt unwind as the start of a fuel-side correction rather than a floor. It expects the gap between prompt and forward gas to keep narrowing as the war premium continues leaving the curve.

German gas-fired power fleet

German gas-fired plants cut output from 4.37 GW to 2.85 GW between 24 and 27 July, even as TTF fell 8 per cent, because below roughly minus EUR 40/MWh the fuel price stopped deciding dispatch. The fleet expects no relief until wind eases or StromVKG's first 4.5 GW auction adds capacity.

French industrial power consumers

France's day-ahead discount to Germany has nearly closed as TTF and EUA rise together on both sides of the border, eroding the arbitrage French industry relied on through the summer. A standing negative spark removes the German demand buffer that kept that spread wide.