Scott Bessent, the US Treasury Secretary, signaled Thursday that America could soon remove sanctions from Iranian oil currently sitting aboard tankers in international waters. The move is designed to inject fresh supply into global oil markets, which have been severely disrupted since Iran sealed off the Strait of Hormuz to shipping.
Iran’s decision to close the strait has created one of the most significant oil supply disruptions in recent memory, removing an estimated 10 to 14 million barrels per day from global markets. Crude prices have responded by climbing above $100 per barrel and staying there for close to two weeks, alarming energy importers and economists across the world.
Bessent explained that the targeted oil — approximately 140 million barrels aboard tankers originally heading to China — could be released into global trade if sanctions are temporarily waived. The Treasury Secretary characterized the maneuver as turning Iran’s own oil against its economic warfare strategy, using the crude to blunt the price impact of the Hormuz closure.
In addition to the potential sanctions waiver, Bessent confirmed the US is planning an independent Strategic Petroleum Reserve release exceeding the previously announced 400-million-barrel G7 coordinated effort. He made it clear that the Treasury’s role in the crisis would be limited to supply-side physical oil market interventions, not financial market operations.
Prominent voices in the sanctions and national security community were not reassured. Experts noted that revenues from any oil sales, even those involving previously stranded crude, would ultimately reach the Iranian government and could be used to fund its military apparatus and proxy forces throughout the region. Analysts questioned whether a temporary price reduction was worth potentially financing an adversary’s war effort.