In one of the more unconventional energy policy announcements in recent memory, Treasury Secretary Scott Bessent revealed Thursday that the United States may temporarily remove sanctions from Iranian crude oil currently stranded on tankers in international waters. Bessent framed the measure as deploying Iran’s own oil reserves as an economic tool against the price pressure created by Tehran’s Hormuz blockade.
The Strait of Hormuz closure has been the defining supply shock for global oil markets in recent weeks, removing an estimated 10 to 14 million barrels per day from circulation. Crude prices have climbed above $100 per barrel and held at elevated levels for close to two weeks, generating significant concern about the economic impact of a prolonged disruption.
Bessent said approximately 140 million barrels of Iranian crude are currently aboard tankers in international waters, oil originally on course for Chinese ports. By temporarily lifting sanctions, the US could redirect this supply to global buyers and provide roughly two weeks of price relief during the ongoing US campaign to force Iran to reopen the strait.
Earlier in the crisis, the Treasury issued a comparable waiver for Russian oil that contributed approximately 130 million barrels to global supply. Bessent also confirmed plans for a unilateral US Strategic Petroleum Reserve release beyond the G7’s 400 million barrel coordinated commitment, while making clear the administration has no plans to intervene in financial oil market instruments.
Experts from the sanctions enforcement and national security communities challenged the strategic wisdom of the proposal. They warned that allowing Iran to profit financially from oil sales, however limited the waiver’s scope, would provide the Tehran regime with resources to fund military activities and sustain its network of regional proxy forces. Critics said the plan represents a significant strategic contradiction, effectively supporting an adversary while claiming to oppose it.