A proposal by Treasury Secretary Scott Bessent to temporarily lift US sanctions on Iranian oil floating on tankers has sparked vigorous debate among energy analysts, sanctions lawyers, and national security experts. Bessent announced the potential measure Thursday, describing it as a strategic tool to counteract the oil price surge caused by Iran’s closure of the Strait of Hormuz.
Oil prices have held above $100 per barrel for nearly two weeks as Iran’s Hormuz blockade has removed an estimated 10 to 14 million barrels per day from global markets. The disruption has created significant economic pressure globally, with particular concern about the impact on oil-importing developing economies.
Bessent identified approximately 140 million barrels of Iranian crude on tankers in international waters — oil originally destined for China — as a potential short-term supply source. A targeted sanctions waiver, he said, would allow this oil to reach global buyers and provide approximately two weeks of supply relief as the US campaign to force Iran to reopen the strait continues.
The Treasury’s precedent for this kind of measure includes a waiver for Russian oil that added roughly 130 million barrels to world supply. Additional relief in the form of a unilateral US Strategic Petroleum Reserve release beyond the G7’s 400 million barrel joint commitment is also being planned, with the administration maintaining its stance against financial market intervention.
Policy and compliance experts were not persuaded. They argued that enabling the sale of Iranian oil — regardless of how the waiver is structured — would generate revenue for the Tehran government that could be used to finance military operations and support proxy forces. Critics described the measure as tactically creative but strategically problematic, questioning whether its brief market benefit justifies the long-term consequences.