Oil drops below $80 as US clears Iran to sell crude in dollars

Brent crude fell more than 1% to just under $80 a barrel Monday after the U.S. Treasury cleared Iran to sell oil and gas in dollars for the first time in decades, including to American buyers, as Vice President JD Vance said Tehran had agreed to allow nuclear inspectors back into the country as early as this week.

"The markets believe that we're moving closer to a deal with every day that passes," Adam Sarhan, managing director at 50 Park Investments, said. The pullback in crude came as the Dow Jones Industrial Average rose 0.4% to 51,775.51 and the S&P 500 added 0.1% to 7,509.47, while the tech-heavy Nasdaq Composite slipped 0.3%.

The Treasury confirmed Monday it was waiving all U.S. sanctions on the production, delivery and sale of Iranian crude oil, petrochemical products and petroleum products through Aug. 21, 2026, a condition of the memorandum of understanding signed last week by President Trump and his Iranian counterpart. The waiver also permits the U.S. to import Iranian crude for domestic use — a reversal of the "maximum pressure" campaign that had locked Tehran out of dollar-denominated oil markets since Trump pulled the U.S. out of the Obama-era nuclear deal.

The resumption of Iranian oil sales adds a significant supply-side variable to a market already adjusting to the reopening of the Strait of Hormuz, through which a fifth of the world's oil typically passes. MarineTraffic data showed 71 confirmed vessel transits through the strait between June 19 and 21, up sharply from recent weeks but still well below the pre-war average of about 135 ships per day before the U.S. and Israel jointly launched their campaign against Iran on Feb. 28.

Nuclear inspections and the path to a final deal

Vance said Monday that Iran had agreed to allow International Atomic Energy Agency inspectors back into the country, calling it "a major milestone for the American people, and the first step in permanently denuclearizing or permanently ending a nuclear weapons program in Iran." Iran's foreign ministry spokesman Esmaeil Baqaei downplayed the nuclear discussions, telling reporters there had been "a very brief discussion" on the topic and that "negotiations on the nuclear issue have not begun."

The first round of U.S.-Iran talks in Switzerland lasted 18 hours, with mediators Pakistan and Qatar saying the two sides established a line of communication to avoid incidents in the Strait of Hormuz and a "de-confliction cell" to enforce the ceasefire in Lebanon. Iran's foreign minister, Abbas Araghchi, called the progress "good" but said the de-confliction mechanism would offer the first real test of the agreement.

Supply relief and the $100 billion question

Iran's Central Bank said Monday that "significant progress" had been made on releasing Tehran's roughly $100 billion in frozen financial assets, with the first tranche likely to be the $6 billion held in Qatar under a Treasury mechanism ensuring funds are used only for humanitarian purposes. Vance said Qatar and senior adviser Jared Kushner had devised a structure ensuring any unfrozen assets would go toward purchasing American corn, soy and wheat — "to make American farmers richer and to feed the Iranian people."

The last time Iran gained meaningful access to global oil markets was under the 2015 Joint Comprehensive Plan of Action, when Tehran boosted exports to about 2.5 million barrels per day before Trump reimposed sanctions in 2018. The current waiver runs through August, with technical talks expected to continue through the week as negotiators work toward a final accord.

This article is for informational purposes only and does not constitute investment advice.