US lifts sanctions on Iranian oil at sea in bid to ease supply pressures

The Trump administration has waived sanctions on Iranian oil purchases at sea for 30 days to ease surging oil prices driven by the US-Israeli war on Iran.
The US treasury secretary, Scott Bessent, said the waiver would bring about 140m barrels of oil to global markets and help relieve pressure on energy supply.
The move reflects White House concern that soaring oil prices – up about 50% to more than $100 a barrel, the highest since 2022 – will hurt US businesses and consumers ahead of the November midterm elections, when Republicans hope to retain control of Congress.
However, Bessent’s earlier suggestion of a waiver raised concerns that it could benefit Iran’s war effort.
It is the third time the US has temporarily waived sanctions in about two weeks.
It had previously eased sanctions on Russian oil, and on Friday issued a general licence allowing the sale of Iranian crude oil and petroleum products loaded on vessels as of Friday to 19 April, according to the licence posted to the US treasury website.
“By temporarily unlocking this existing supply for the world, the United States will quickly bring approximately 140 million barrels of oil to global markets, expanding the amount of worldwide energy and helping to relieve the temporary pressures on supply caused by Iran,” Bessent said in a statement on X.
“In essence, we will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury.”
The licence, posted to the Treasury’s website after market hours, said Iranian oil could be imported into the US under the waiver when necessary to complete its sale or delivery. The US has not meaningfully imported Iranian oil since Washington imposed measures after the 1979 revolution.
It was unclear whether any Iranian oil would enter the country as a result of the waiver. Cuba, North Korea and Crimea are among the regions excluded from the license.
Bessent had floated lifting the sanctions in a Fox Business interview on Thursday, prompting analysts to point out the policy could actually benefit Iran’s war effort.
“To put it mildly, this is bananas,” the Blackstone Compliance Services director, David Tannenbaum, told the BBC. “Essentially, we’re allowing Iran to sell oil, which could then be used to fund the war effort.”
Bessent pushed back on that analysis in his Friday statement. “This temporary, short-term authorization is strictly limited to oil that is already in transit and does not allow new purchases or production,” he wrote.
“Iran will have difficulty accessing any revenue generated and the United States will continue to maintain maximum pressure on Iran and its ability to access the international financial system.”
Vital energy infrastructure in Iran and neighbouring Gulf states has been attacked, and Iran has effectively closed the strait of Hormuz, a conduit for about 20% of the world’s oil and liquefied natural gas.
Energy analysts, including Brent Erickson, a managing principal at Obsidian Risk Advisors, have said the administration’s efforts to control prices would not have a meaningful impact until the strait is opened to vessels.
“The easing of sanctions raises concerns about the rapid depletion of Washington’s economic toolkit,” to dampen oil prices, Erickson said. “If we’ve reached the point of loosening sanctions on the country we are at war with, we’re really running out of options.”
The move is expected to benefit China, the top buyer of Iranian oil. The US energy secretary, Chris Wright, said supplies could reach Asia within three or four days and hit the market after being refined over the next month and a half.
Meanwhile, Iran’s foreign minister, Abbas Araqchi, told a Japanese news agency Tehran had started talks with Tokyo about possibly opening the strait to allow the passage of Japanese-related vessels.
Japan depends on the Middle East for about 95% of its oil supplies and gets about 90% of its oil shipments via the strait. Japan is among the countries forced to release oil from their reserves amid the surging prices.