With global oil markets in turmoil and prices well above $100 per barrel, Treasury Secretary Scott Bessent revealed Thursday that the US government is weighing a plan to temporarily lift sanctions on Iranian oil stranded at sea. The measure is designed to quickly add supply to markets disrupted by Iran’s deliberate closure of the Strait of Hormuz.
Iran’s blockade of the Strait of Hormuz has removed between 10 and 14 million barrels per day from global oil supply, causing the sustained price spike that has persisted for nearly two weeks. The disruption has affected transportation costs, industrial production, and consumer prices across the global economy.
Bessent said approximately 140 million barrels of Iranian crude are currently on tankers in international waters, oil originally destined for China. By temporarily lifting sanctions, the Treasury could redirect this oil to global markets, providing an estimated two-week supply bridge as the US continues its broader campaign to force Iran to reopen the strait.
The Treasury has previously taken a similar approach with Russian oil, issuing a waiver that added approximately 130 million barrels to world supply. Bessent also confirmed a unilateral US Strategic Petroleum Reserve release is planned beyond the 400 million barrel G7 commitment, and emphasized the government’s intention to stay out of oil futures markets.
Critics in the sanctions policy and national security community were vocal in their opposition. Experts argued that allowing Iranian oil to be sold, even under a narrow temporary waiver, would provide the Iranian regime with oil revenues that could be used to finance military activities and regional proxy forces. Analysts described the plan as a significant strategic concession dressed up as a market stabilization measure.