A 60-day suspension of many U.S. sanctions on Iran, announced on Monday, promises short-term revenue for Tehran but faces a tangle of legal, political and commercial obstacles that will complicate any prompt or comprehensive return to open markets.
The interim arrangement, part of a 14-point memorandum of understanding agreed by Washington and Tehran, tasks the United States with beginning to remove various sanction measures on a timetable to be formalized in a final pact within 60 days - a period that may be extended. As an immediate step, the U.S. Treasury granted a temporary general license authorizing the production, delivery and sale of Iranian-origin crude oil and petrochemical and petroleum products through August 21.
That temporary license could unlock material near-term revenue for Iran. The license issued on Monday could be worth up to $3 billion for Iran over two months, by some estimates, and analysts cited in the announcement said the figure could expand to "at least tens of billions of dollars" if the permissions are made permanent - a change that would remove the discount that has depressed Iranian oil prices, allow sales beyond existing buyers and boost exports.
Why full unwinding is difficult
The challenge goes beyond a single executive action. The United Nations, the United States and the European Union, among others, have maintained sanctions, trade embargoes and asset freezes against Iran since the late 1970s, aimed at Iran's nuclear efforts, human rights record and ties to militant groups in the region. Washing away a patchwork developed over decades will require multiple types of action.
- Some sanctions have been imposed by presidents through executive orders and therefore can be rescinded by a sitting president.
- Other restrictions are set by statute and would require congressional action to repeal or amend.
- Many measures were enacted by international bodies or individual governments outside the United States and will require coordination with the U.N., the EU and other nations that maintain separate sanctions regimes.
"You have this tangled nest of sanctions, and it’s not just executive orders, it’s congressional sanctions," said Juan Zarate, a former deputy national security adviser for combating terrorism. That characterization captures why the process could be slow and legally intricate.
Congressional and legal complications
U.S. engagement with Iran on sanctions dates back to 1979, after the seizure of the U.S. embassy in Tehran. Since then, Congress has passed multiple sanctions laws while presidents have layered executive orders to address Iran’s nuclear program and support for groups the U.S. designates as terrorist organizations, including Hamas, Hezbollah and the Houthis in Yemen.
Since early 2025, Treasury’s Office of Foreign Assets Control, commonly known as OFAC, has designated more than 1,000 people, vessels and aircraft, according to Treasury data. Parsing that list would be labor-intensive: Jeremy Paner, a partner at Hughes Hubbard & Reed and a former U.S. sanctions official, said delisting the thousands of designated entities would take OFAC at least a year.
Some sanctions can be reversed by the president, but measures linked to other statutory mandates - for example, sanctions tied to organizations that Congress has specifically targeted - will need legislative action. That prospect has already generated sharp public pushback among Republican lawmakers and injects a political dimension that could limit how much is lifted and how quickly.
"Any attempt to comprehensively remove layer upon layer of sanctions will be like peeling back an onion - exposing the administration - not just to legal complexities but political risks," said Matt Zweig, managing director of policy at FDD Action, the advocacy arm of the Foundation for Defense of Democracies.
Private sector caution and lingering liabilities
Even if governments reach agreement, commercial actors may be slow to re-engage. Banks, oil traders, insurers and logistics providers have built extensive compliance programs and risk-averse cultures around Iran-related activity. They also face separate sanctions from Britain, the U.N., the EU and others, meaning a U.S. change does not automatically remove other barriers.
The most recent license is broader than a prior one issued in March, extending not only to oil and petroleum products but also to banking, insurance and transportation connected to the oil trade - measures intended to speed Tehran's access to revenue. Yet firms remain exposed to liabilities beyond state enforcement. The Justice Against Sponsors of Terrorism Act, enacted in 2016, allows victims of attacks to sue investors and companies for allegedly aiding designated groups, and aides to the deal have said that measure is unlikely to be repealed.
"We’ve kind of beaten the markets up with the risk of doing business with or through Iran, so you can’t just flip a switch and say, 'Oh, now it’s okay to do business with Iran,'" Zarate said. That sentiment is echoed by compliance and risk professionals who expect lingering legal and reputational concerns to keep many institutions at arm's length.
Brett Erickson, principal with Obsidian Risk Advisors, said that given these exposures, the private sector is unlikely to commit large, multibillion-dollar investments until the political and legal framework is far more settled. "We’re not going to see massive multi-billion dollar commitments until things are far more cemented and politically stable," he said. "There’s just a long way to go."
Security and policy concerns
Officials and analysts also point to the risk that lifting sanctions could free funds that the U.S. believes might flow to groups it considers a threat. Stephanie Connor, a former OFAC official, warned that restoring access to Iranian revenues raises the question of whether funds could find their way to the Islamic Revolutionary Guard Corps, a paramilitary force the United States has designated a foreign terrorist organization.
Decisions on how broadly to remove restrictions therefore carry implications not only for Iran’s economy but also for regional security calculations, complicating the political calculus in Washington and among allied governments.
What the short-term license means
The temporary license provides an immediate channel for crude and related products through August 21 and expands banking, insurance and transportation permissions tied to the oil trade, a step designed to accelerate access to revenue. China currently purchases the bulk of Iranian oil under sanctions, and the broader license could permit Tehran to diversify buyers and expand exports if the permissions are extended or made permanent.
Edward Fishman, a senior fellow at the Council on Foreign Relations, said the immediate effect could be substantial and that permanent removal of sanctions would dramatically change Iran’s oil economics. But those longer-term outcomes depend on the successful navigation of legal processes, congressional approvals and international coordination.
Summary
The 60-day U.S. reprieve and temporary license provide a short-term revenue pathway for Iran, potentially worth up to $3 billion in two months. However, dismantling the complex lattice of U.S., international and private-sector restrictions built over decades will face legal hurdles, congressional skepticism, coordination challenges with other sanctioning authorities and persistent corporate caution. Those constraints make durable economic relief for Tehran uncertain and likely to unfold slowly.
Key points
- The U.S. issued a temporary general license permitting Iranian crude and related trade through August 21, and a 60-day window was set to negotiate a final schedule for removing sanctions.
- Removal of sanctions would require a mix of executive action, congressional approvals and international coordination, complicating and slowing any comprehensive unwind.
- Private-sector reluctance - from banks, insurers and oil companies - and potential legal liabilities mean companies may be slow to re-enter Iranian markets even if formal restrictions are eased.
Risks and uncertainties
- Legal and legislative hurdles - Some sanctions are statutory and need congressional action to lift, exposing the process to political opposition; this impacts financial institutions and oil companies that need clarity on legal permissibility.
- Corporate and reputational caution - Banks, insurers and traders may avoid re-engaging with Iran due to compliance burdens and lawsuit risk under existing U.S. laws, limiting the immediate commercial impact.
- Security funding concerns - Lifting sanctions risks unintentional funding flows to groups the U.S. regards as threats, affecting defense, regional security and related policy considerations.