A proposal to temporarily lift US sanctions on Iranian crude oil stranded at sea became a major topic of discussion Thursday after Treasury Secretary Scott Bessent described it publicly as a potential emergency supply measure. The plan is aimed at countering the economic impact of Iran’s closure of the Strait of Hormuz, which has driven oil prices above $100 per barrel for nearly two weeks.
Iran’s decision to close the Strait of Hormuz has been the defining shock to global oil markets in recent weeks, removing an estimated 10 to 14 million barrels per day from circulation. The resulting price surge has prompted governments, energy companies, and international bodies to scramble for solutions.
Bessent said the US has identified approximately 140 million barrels of Iranian crude sitting on tankers in international waters, oil originally destined for Chinese buyers. A temporary sanctions waiver could allow this oil to enter global markets, providing an estimated 10 to 14 days of relief while the US continues its campaign to reopen the strait.
The Treasury’s supply response also includes an additional unilateral release from the US Strategic Petroleum Reserve above the 400 million barrel G7 joint commitment. Bessent was explicit that the administration would not intervene in oil futures or financial energy markets, limiting its actions to the physical supply side.
Experts in international energy policy and sanctions law raised serious objections. They warned that any oil sales authorized under such a waiver would generate revenue for the Iranian government, revenue that could be channeled toward military operations and support for proxy forces in the region. Critics argued that the proposal’s immediate price benefit is real but modest and short-lived, while its strategic costs could be significant and durable.