US reverses decades of Iran sanctions, signalling major policy shift

The Trump administration’s attempt to dismantle decades of sanctions on Iran marks a dramatic reversal in one of Washington’s most entrenched foreign-policy tools, forcing governments, banks and multinational firms to navigate a fast-changing web of permissions and prohibitions.

According to Bloomberg, the shift is part of a broader arrangement intended to end the war with Iran, reopen the Strait of Hormuz and ease pressure on global energy markets. The Financial Ti...

mes said the deal has created confusion for risk-averse financial institutions, because the White House is trying to pair a sweeping loosening of restrictions with a schedule that is still meant to preserve some legal and practical control over how quickly sanctions are lifted.

The latest plan centres on a 14-point memorandum of understanding signed by President Donald Trump and Iranian President Masoud Pezeshkian on 17 June, Fortune reported. That agreement reportedly calls for the removal of all US sanctions on Iran on “an agreed upon schedule”, a formulation that leaves plenty of room for uncertainty even as it signals a sharp policy reset.

The scale of the change is all the more striking given how aggressively the Trump administration previously expanded sanctions pressure. In May 2018, Mr Trump withdrew the United States from the nuclear agreement known as the Joint Comprehensive Plan of Action, describing it as deeply flawed. Over the following months, his administration reimposed and then widened sanctions across Iran’s energy, shipping, shipbuilding and financial sectors, relisting hundreds of people, companies, vessels and aircraft.

That framework had remained a central feature of US policy until this year. In March, the Washington Post reported that the administration lifted sanctions on 140 million barrels of Iranian crude already loaded onto ships, in an effort to cool surging oil prices after the US attack on Iran. The decision provided Iran with badly needed revenue, but also underscored how quickly sanctions policy was being subordinated to the economics of the war and the global energy squeeze.

The current reversal therefore represents more than a tactical adjustment. It suggests the administration is now prepared to trade away one of the principal levers of American pressure on Tehran in exchange for a ceasefire and a broader regional settlement, even if the result is to unsettle banks, insurers and trading houses that have spent years building compliance systems around Iran’s isolation.

For business and financial markets, the immediate problem is not simply whether sanctions will go, but how and when. A gradual unwinding could leave firms exposed if they move too early, while a rapid repeal could force a scramble to reopen trade, transport and payment channels that have been effectively closed for years. For Iran, the prospect is the opposite of the regime of pressure that defined the post-2018 period: a chance to bring its oil exports, banking links and access to dollar-denominated trade back into the legal economy.

Source: Noah Wire Services