The only thing leaving the Islamic regime in large quantities right now is headlines. Not crude oil. Not new export contracts. Just reports suggesting business is about to return.

This week, Iranian state media and several international outlets reported that the Islamic regime is holding early discussions with 3 Japanese companies about resuming crude exports for the first time since 2019. On paper it sounds significant. Japan was once one of Iran’s largest customers before U.S. sanctions forced refiners to stop buying Iranian oil. The reports create the impression that major Asian buyers are preparing to return and that Iran’s oil sector is beginning to recover after the war.

According to Reuters, the discussions are preliminary and depend entirely on a temporary U.S. Treasury waiver known as General License X. The license was issued on June 22 following the June 17 memorandum of understanding between the U.S. and the Islamic regime. It expires on August 21, giving any agreement only a 60 day window unless the waiver is extended.

That window creates practical problems before a single barrel is loaded.

Oil contracts require negotiations over pricing, volumes, financing, insurance, shipping schedules, inspections and payment mechanisms. Those steps normally take weeks. Even if an agreement were reached immediately, there is little time left before the waiver expires.

Japanese refiners are showing little urgency. A senior executive at a major Japanese refiner told Reuters that insurance remains the biggest obstacle. The concern reflects conditions in the Gulf rather than commercial demand. Last week, a commercial vessel was attacked in the Strait of Hormuz. The Islamic Revolutionary Guard Corps has repeatedly stated that vessels transiting the waterway require its approval. Maritime security assessments also continue to warn that dozens of naval mines remain in parts of the Gulf following the recent conflict. For insurers, those risks translate directly into higher costs and uncertainty.

Shipping time creates another obstacle. Tankers loading crude at Kharg Island require several weeks to reach Japan. Iranian officials acknowledged to Reuters that any meaningful commercial agreement would likely require the United States to extend General License X because the current authorization may expire before shipments are completed. Trade analysts quoted by Reuters reached a similar conclusion, saying the temporary waiver is unlikely to generate significant orders from Asian refiners that already have adequate supply. China’s independent teapot refineries remain the only consistent buyers of Iranian crude.

Miad Maleki, a senior fellow at the Foundation for Defense of Democracies and a former U.S. Treasury sanctions expert, argues that General License X does not amount to meaningful sanctions relief despite its broad scope. In an analysis published by FDD, Maleki noted that GL X allows Iran to produce, ship and sell oil, rather than simply unload cargoes already at sea under the narrower license that preceded it. It also permits payments to flow back to the Islamic regime, including to blacklisted Iranian entities, and allows those transactions to be conducted in U.S. dollars. According to FDD’s analysis, the license directly benefits the IRGC, which controls large parts of Iran’s energy sector. The IRGC remains designated by the United States as a Foreign Terrorist Organization. Iran’s own budget allocates roughly 1 third of oil revenue, about $12.4 billion, to the armed forces and the IRGC.

The Islamic regime built its 1405 budget, covering March 2026 through March 2027, on the assumption that it would export about 1.77 million barrels of crude per day at an average price of $55 per barrel. That would have generated roughly $35 billion in annual oil revenue. The U.S. blockade that began on April 13 disrupted those assumptions almost immediately. For nearly 2 months exports fell to a fraction of normal levels. From mid April onward, average exports dropped to roughly 228,000 barrels per day, about 11 percent of pre blockade volumes.

Exports have recovered since the ceasefire.

Some estimates place current exports near 1.66 million barrels per day. Others suggest volumes have climbed to about 2.1 million barrels per day, slightly above pre war levels. Even if the higher estimate proves accurate, the revenue lost during nearly 2 months of sharply reduced exports cannot be recovered within the same fiscal year. The budget shortfall already exists.

China continues to dominate Iran’s export market, with independent teapot refineries accounting for roughly 90 percent of purchases. Reuters reported, however, that Chinese buying has slowed because refining margins have weakened. China remains Iran’s primary customer because few alternatives exist, not because demand is expanding. The discussions with Japanese companies have not changed that picture.

Iran’s national oil company has reportedly informed traditional customers, including Japanese refiners, that supply will be available if a broader agreement is reached and sanctions are lifted. That is a conditional offer rather than a commercial contract. No purchase agreements have been announced, no cargoes have been scheduled and no shipping dates have been confirmed.

The reports also come as the Islamic regime faces mounting pressure at home. More than 52 percent of government revenue now comes from taxation. During the war and its aftermath, large parts of the domestic economy, including internet based businesses, were partially or completely shut down for months. The rial has traded near record lows of about 1,420,000 to the U.S. dollar. Official inflation remains above 40 percent, while many independent estimates place it closer to 50 percent.

Against that backdrop, reports that Japanese companies are considering a return to Iranian oil carry political value even if they produce little commercial value. The discussions remain preliminary, the waiver expires in August, insurers remain cautious, shipping timelines are tight and refiners already have sufficient supply. At this stage, the reports are moving considerably faster than the oil itself.