Treasury Secretary Scott Bessent staked out an aggressive position on oil market stabilization Thursday, revealing that the United States may temporarily lift sanctions on Iranian crude oil stranded on tankers as part of a broader emergency supply response. The announcement came as oil prices have remained above $100 per barrel for nearly two weeks following Iran’s closure of the Strait of Hormuz.
The strait’s closure has been catastrophic for global oil supply stability. Iran’s blockade has removed between 10 and 14 million barrels of daily oil output from world markets, creating a supply shock that has driven prices to levels not seen consistently in recent years and raised fears of broader economic damage if the disruption continues.
Bessent disclosed that about 140 million barrels of Iranian crude are currently sitting on tankers that had been heading to Chinese ports. He outlined the potential benefits of a temporary sanctions waiver that would allow this oil to reach global buyers, estimating it would provide approximately two weeks of supply bridge while US diplomatic and military efforts against the Hormuz blockade continue.
Drawing on recent precedent, Bessent cited the Treasury’s earlier waiver for Russian oil, which redirected approximately 130 million barrels to world markets. Additional supply from a unilateral US Strategic Petroleum Reserve release, beyond the G7’s coordinated 400 million barrel commitment, is also in the pipeline, while the administration has ruled out any engagement in financial oil market trading.
Compliance and foreign policy experts were critical. They argued that any revenue generated by Iranian oil sales, even under a tightly scoped waiver, would ultimately benefit the Iranian government, providing funds that could sustain military operations and support proxy forces across the region. Analysts broadly warned that the plan’s brief market benefit does not justify the strategic cost of effectively financing an adversary during an active conflict.