Scott Bessent, the US Treasury Secretary, announced Thursday that Washington may remove sanctions on Iranian oil stranded on tankers as part of an emergency strategy to offset the supply gap created by Iran’s Strait of Hormuz closure. The announcement reflects the administration’s growing urgency to address oil prices that have exceeded $100 per barrel for nearly two weeks.
Iran’s Hormuz blockade has been one of the most disruptive supply events in recent global energy history, removing an estimated 10 to 14 million barrels per day from the market. The resulting price surge has rattled economies worldwide and placed enormous pressure on the US administration to find supply-side solutions quickly.
Bessent identified approximately 140 million barrels of Iranian crude on tankers originally bound for China as the core of his proposed solution. By issuing a temporary sanctions waiver, the Treasury could redirect this oil to global buyers, providing an estimated two-week supply cushion while the broader US campaign against Iran develops.
The Treasury’s broader supply strategy includes an additional unilateral release from the US Strategic Petroleum Reserve beyond the 400 million barrel G7 coordinated commitment. Bessent emphasized that the administration’s approach to the crisis is focused on increasing physical oil supply, not intervening in financial oil markets or futures.
Critics from the sanctions and international security community warned of serious unintended consequences. Compliance experts argued that any financial benefit to the Iranian government from oil sales, even sales of stranded crude under a narrow waiver, would effectively provide Tehran with resources to sustain its military and regional proxy operations. Analysts broadly described the plan as providing short-term market relief at a disproportionately high strategic cost.