Treasury Secretary Scott Bessent sparked a major policy debate Thursday by announcing the US is considering lifting sanctions on Iranian oil stranded on tankers in international waters. Bessent framed the potential measure as a supply-side fix to global oil prices that have surpassed $100 per barrel following Iran’s Strait of Hormuz shutdown.
The Hormuz closure has created a daily supply gap of between 10 and 14 million barrels, causing a sustained oil price surge that has raised economic concerns worldwide. Governments across multiple continents have been seeking emergency supply solutions to prevent the price spike from further destabilizing already strained economies.
Bessent revealed that approximately 140 million barrels of Iranian crude are currently on tankers bound for China. A targeted sanctions waiver, he explained, could redirect this oil to global markets, providing roughly two weeks of supply relief while the US campaign against the Hormuz blockade continues.
The Treasury has previously used a similar approach, issuing a waiver for Russian oil that contributed approximately 130 million barrels to global supply. Bessent also confirmed plans for additional US Strategic Petroleum Reserve drawdowns beyond the 400 million barrel G7 commitment, with a firm stance against intervening in financial energy markets.
Experts, however, issued strong warnings. Compliance professionals and geopolitical analysts argued that allowing Iran to sell its oil, even under the most restricted waiver, would generate funds that could sustain Iran’s military effort and support proxy forces. Critics called the proposal short-sighted and warned that it could ultimately strengthen Tehran’s hand, both economically and strategically.