U.S. Treasury waives sanctions on Iranian oil as part of interim agreement to end war

Senior fellow at the Macdonald-Laurier Institute Joe Varner discusses U.S. negotiators meeting with Iran’s parliamentary speaker.

OBBUERGEN, Switzerland -- U.S. Vice-President JD Vance on Monday said his lengthy talks with senior Iranian officials in Switzerland created a “good foundation for a successful final deal” as they seek a permanent end to the war that the U.S. and Israel began in late February.

“The final deal is the house,” Vance told reporters after initial talks with Iran’s parliamentary speaker, Mohammad Bagher Qalibaf. “We set the foundation. We haven’t built the house, but we’ve laid a successful foundation to get to a good place for the American people.”

Iran noted “major progress” to end the fighting in Lebanon and called that the first real test of the negotiations.

The mediation effort in Switzerland, which started Sunday and stretched into early Monday, had rocky moments. But the talks also led to some agreements, mediators said, as technical talks continue this week.

In other developments, the U.S. Treasury issued a 60-day licence waiving sanctions on Iranian oil as part of the interim agreement to end the war. The license authorizes the production, delivery and sale of Iranian oil. It will last through Aug. 21.

U.S. Treasury Secretary Scott Bessent cited the “ongoing productive talks in Switzerland” in a post on X announcing the licence.

Trump was not in Switzerland but loomed large over talks

Trump did not attend what was dubbed the “Lake Lucerne Summit,” but his presence certainly loomed large.

The talks were jolted by statements from Trump, who, from thousands of miles away, fired off comments that offended the Iranians.

Iranian state media said talks had paused after the “publication of an insulting message by the U.S. President.” The negotiations later continued.

Vance pushed back against the notion that Trump’s threats complicated the talks.

“No, they didn’t throw a wrench in the system,” Vance said. He added, “Yes, they did threaten to walk out, or at least there were social media threats that they would walk out. But we were negotiating well past one in the morning yesterday, so they didn’t walk out.”

Vance floats unfreezing Iranian assets to purchase U.S. goods

The vice-president suggested that the U.S. could agree to unfreeze Iranian assets for purchases of U.S. soy, corn and wheat. He said Jared Kushner, Trump’s son-in-law and one of the lead U.S. negotiators, came up with the idea with officials from Qatar.

Vance said Qatar would have approval over the process, and Iranian money that would be accessible as sanctions were lifted would buy American products “for the benefit of the Iranian people.”

Iran, which has pressed for the unfreezing of billions of dollars in assets, has not commented on the idea. The assets have been made inaccessible over years of sanctions, banking restrictions and legal disputes imposed by the U.S. and international community on the Islamic Republic.

High-level talks have ended but technical talks continue

In a joint statement, mediators Pakistan and Qatar hailed what they called “encouraging progress.”

The interim deal to end the fighting in Iran, signed last week by the leaders of the U.S. and Iran, sets a 60-day period for negotiators on issues including the future of Tehran’s nuclear program amid concerns that Iran wants to use it for military purposes, a claim the country denies.

Vance and U.S. officials claimed progress on multiple fronts, including the establishment of “mechanisms” to ensure the Strait of Hormuz, a vital waterway for global energy shipments, remains open and that a ceasefire in the fighting between Israel and Iran-backed Hezbollah militants in southern Lebanon holds.

While he was returning to Washington, Vance said the technical talks are critical.

“We wanted to set up a structure for that so that you could have proper political oversight, but obviously, as much as this place is very beautiful, I can’t stay here for the next 60 days,” Vance told reporters.

U.S. envoys Kushner and Steve Witkoff are handling many of the technical details.

Meanwhile, investors absorbed the ups-and-downs of Trump’s strategy in Iran. Trading was mixed early Monday and oil prices edged lower on fresh optimism about the progress of the U.S.-Iran negotiations.

Vance warns about the perils of Iranian ‘trash talk’

Trump, over the weekend, made clear he was annoyed by Iran’s public commentary on the strait, which Iran’s military said it closed Saturday in response to continued fighting in Lebanon. U.S. Central Command has disputed that Iran closed the strait again.

Ahead of the talks, Iranian President Masoud Pezeshkian had vowed to “never back down from the right to enrich uranium,” according to state media.

Trump on Sunday told Fox News in a phone interview that Pezeshkian should watch what he says and threatened to take over Iran, according to one of the news channel’s correspondents.

Trump also posted on social media as negotiators worked: “Iran must immediately stop their highly paid PROXIES in Lebanon from causing trouble. If they don’t, we’ll hit Iran very hard again, just like we did last week, only harder!!!”

Vance said the Iranians should have expected such a reaction from Trump.

“What we told the Iranians yesterday is when you guys engage in what us millennials might call trash talk, you can’t expect the President of the United States not to respond and not to correct the record,” Vance said.

Iranians agree there was progress on their top issue

Iranian Foreign Minister Abbas Araghchi wrote on X that mediators delivered “major progress to end the Lebanon War.” But he said the first “real test” of negotiations would be whether the mechanism succeeds in halting the fighting between Israel and Hezbollah.

Iran has insisted on first addressing the fighting in Lebanon. Neither Israel nor Hezbollah is a signatory to the U.S.-Iran deal.

A renewed ceasefire in Lebanon appeared to be holding, and Israel’s military said it would lift movement restrictions for residents near the Israel-Lebanon border on Monday.

Cautious calm continued Monday in Lebanon, with no Israeli strikes reported overnight. Hezbollah has not announced any attacks on Israeli forces since Saturday.

The lull in fighting in Lebanon is the longest since the latest Israel-Hezbollah war began on March 2.

“This region has been a basket case for a very long time,” Vance said.

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By Aamer Madhani, Jamey Keaten, Seung Min Kim And Josh Boak

Kim and Boak reported from Washington. Associated Press reporters Abby Sewell in Beirut, David Rising in Bangkok, Jon Gambrell in Dubai, United Arab Emirates, and Melanie Lidman in Tel Aviv, Israel, contributed to this story.