Treasury Secretary Scott Bessent opened a new front in Washington’s effort to combat soaring oil prices Thursday, revealing that the US may temporarily remove sanctions from Iranian crude oil stranded on tankers in international waters. The proposal adds a provocative new dimension to the administration’s response to the oil market crisis triggered by Iran’s Hormuz blockade.
Iran’s closure of the Strait of Hormuz has been the primary driver of the global oil price surge, removing an estimated 10 to 14 million barrels of daily supply from the market. Prices have exceeded $100 per barrel for close to two weeks, creating significant economic strain across oil-dependent industries and economies worldwide.
Bessent disclosed that approximately 140 million barrels of Iranian crude are sitting on tankers originally destined for China. By temporarily waiving sanctions, the administration could redirect this supply to global markets, providing roughly two weeks of price relief during the critical phase of the US campaign against the Hormuz blockade.
The plan mirrors a previous Treasury waiver for Russian oil that redirected approximately 130 million barrels to world supply. An additional unilateral US Strategic Petroleum Reserve release beyond the G7’s 400 million barrel coordinated drawdown is also in the works, with the administration maintaining a firm policy against financial market intervention.
Experts in foreign policy and sanctions compliance raised serious concerns. They warned that allowing Iran to benefit financially from oil sales — even under a narrow temporary waiver — would provide the regime with funds for military activities and proxy support, effectively subsidizing an adversary during an active conflict. Critics described the measure as a short-term price fix with long-term strategic consequences that could significantly undermine US policy toward Iran.