Treasury Secretary Scott Bessent announced Thursday that the US may move to lift sanctions on Iranian oil stranded at sea, a move aimed at alleviating the severe supply crunch that has followed Iran’s closure of the Strait of Hormuz. The proposal marks one of the most significant energy policy decisions of the current administration.
Iran’s Hormuz blockade has had an immediate and severe effect on global oil supply and pricing. An estimated 10 to 14 million barrels per day have been taken off the market, and crude prices have remained above $100 per barrel for approximately two weeks, creating economic pressure across multiple continents.
Bessent said that around 140 million barrels of Iranian crude are currently on tankers at sea, oil that was originally heading to China. By temporarily lifting sanctions on this oil, the administration hopes to bring it to global markets and create a supply cushion of approximately 10 to 14 days while the US continues applying pressure on Iran through military and diplomatic channels.
Earlier in the crisis, the Treasury issued a similar waiver for Russian oil, which introduced approximately 130 million barrels into world supply. Bessent confirmed an additional unilateral release from the US Strategic Petroleum Reserve is being planned, beyond the 400 million barrels already committed in a G7 joint release, while ruling out any Treasury action in oil futures markets.
Experts in sanctions policy and international security were forthright in their criticism. They argued that enabling the sale of Iranian oil, even with a narrow waiver, would funnel financial resources to the Tehran government, resources that could be used to finance the very conflict the US is seeking to contain. Critics said the proposal is strategically confused and risks empowering an adversary under the guise of market stabilization.