The 60-day temporary US waiver on Iran's oil exports entered into force on June 22. The waiver, which will last until August 21, 2026, provided a short-term reprieve for Iran's economy.
According to Reuters estimates, Iran's oil exports rose over 70% in June to about 640,000 barrels per day. Oil and energy expert Amer al-Shubaki stressed that despite this increase, Iran's economy faces structural challenges.
Economy gasping for breath
Al-Shubaki likened Iran's economy to a 'patient in intensive care.' The expert noted that the US concessions are temporary measures intended only to ensure minimal cash flow, saying: 'These incentives were designed to give the economy some oxygen so it can breathe and resume part of its normal activities in the absence of sanctions.'
Al-Shubaki said the assets Iran is expected to access under the current memorandum of understanding are worth about $12 billion. He added that Tehran plans to set up a strategic investment fund with these resources to support infrastructure.
Access to funds not immediate
The expert warned that it could take weeks for the proceeds from oil sales to reach Iran, citing legal, commercial, and banking obstacles. He noted that some countries like Japan have shown interest in Iranian oil but remain hesitant on financial transactions due to Tehran being on the Financial Action Task Force (FATF) blacklist.
Al-Shubaki also pointed out that actual exports could exceed the announced figures if Iran releases oil from floating storage that it had kept ready outside the US blockade.
Oil-for-food mechanism
US President Donald Trump had announced that the Iranian funds to be released would be used only to buy food from American farmers. However, Central Bank of Iran Governor Abdolnasser Hemmati stated that the signed memorandums of understanding contain no obligation to purchase agricultural products from the US.
Trump warned Tehran, saying 'Iran must use its oil revenues to buy food for its people, not to rebuild its military,' and threatened that 'if Iran behaves badly, Washington will do what it has to do.'
Al-Shubaki noted that the Trump administration drafted this agreement with much stricter terms compared to the 2015 nuclear deal, saying Washington wants to prevent funds from being directed to military uses and force Iran to buy American agricultural products.
Low production capacity
Iran's energy infrastructure suffered serious damage from previous sanctions. Facilities in the Mahshahr and Asaluyeh regions, which form the backbone of the petrochemical sector, experienced production losses of around $13 billion.
Al-Shubaki said that some oil fields had been shut down earlier because storage tanks were full, and reactivating them would take months. He noted that whereas Iran exported about 6 million barrels per day in 1979, today it struggles to reach even the 2 million barrel level, with total production capacity at best between 2 and 4 million barrels per day.
The expert added that the flow of Iranian oil into the market is pushing down global prices, which serves US interests and benefits importing countries but creates detrimental competition for other producers in the region.
