Treasury Secretary Scott Bessent announced Thursday a plan that could reshape the short-term global oil market: temporarily lifting US sanctions on Iranian crude oil stranded on tankers to combat the price surge caused by Iran’s Strait of Hormuz blockade. The proposal has drawn sharp reactions from energy and national security experts.
Oil prices have remained above $100 per barrel since Iran’s closure of the Strait of Hormuz removed an estimated 10 to 14 million barrels per day from global supply. The sustained disruption has placed considerable economic strain on oil-importing nations and raised fears of prolonged high energy prices affecting global growth.
Bessent identified approximately 140 million barrels of Iranian crude on tankers originally headed for China as a supply buffer that could be unlocked. He characterized the potential waiver as turning Iran’s own exports against its strategy of using the strait’s closure to create upward pressure on global oil prices.
The Treasury has a working model for this approach in the form of a previous waiver for Russian oil that added approximately 130 million barrels to world supply. Additional supply from a unilateral US Strategic Petroleum Reserve release, beyond the G7’s coordinated 400 million barrel commitment, is also planned, with no intervention in financial markets.
Critics from compliance and security backgrounds questioned the wisdom of the plan. They argued that Iran would gain financially from any oil sales authorized under such a waiver, receiving revenue that could fund military operations and support proxy activities throughout the region. Several analysts warned that the proposal was strategically self-defeating, providing a short-term market fix while simultaneously financing an adversary.
