On a Friday in March, with oil up about 50% to more than $100 a barrel, the Trump administration waived sanctions on Iranian crude that was already at sea. The waiver ran for 30 days. Treasury Secretary Scott Bessent said it would put about 140 million barrels on the world market.
The general licence, posted to the Treasury website after markets closed, covered Iranian crude oil and petroleum products loaded on vessels as of that Friday, and it ran to 19 April. Oil could be imported into the US under it when needed to finish a sale or delivery. Washington has not meaningfully imported Iranian oil since the measures it imposed after the 1979 revolution, and it was unclear whether any would arrive. Cuba, North Korea and Crimea were among the places excluded.
It was the third temporary waiver in about two weeks. The US had already eased sanctions on Russian oil.
Bessent’s case
“In essence, we will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury,” Bessent wrote on X. He called the authorisation “temporary” and “strictly limited to oil that is already in transit,” with no new purchases or production allowed. “Iran will have difficulty accessing any revenue generated,” he said, and the US would keep up maximum pressure on Iran’s access to the international financial system.
The Guardian reported that the move reflected White House worry that high prices would hurt businesses and consumers before the November midterm elections, when Republicans hope to keep control of Congress.
Critics: ‘bananas’
Bessent had floated the idea in a Fox Business interview the day before, and analysts quickly said it could help pay for Iran’s war. “To put it mildly, this is bananas,” David Tannenbaum, a director at Blackstone Compliance Services, told the BBC. “Essentially, we’re allowing Iran to sell oil, which could then be used to fund the war effort.”
Brent Erickson of Obsidian Risk Advisors said efforts to control prices would not matter much until the Strait of Hormuz reopens. Iran has effectively closed the strait, which carries about 20% of the world’s oil and liquefied natural gas. “If we’ve reached the point of loosening sanctions on the country we are at war with, we’re really running out of options,” he said.
China, the top buyer of Iranian oil, was expected to benefit. Energy Secretary Chris Wright said supplies could reach Asia within three or four days and hit the market after about a month and a half of refining.
Iran’s foreign minister, Abbas Araqchi, told a Japanese news agency that Tehran had begun talks with Tokyo about letting Japan-related vessels through the strait. Japan depends on the Middle East for about 95% of its oil and gets about 90% of its shipments via Hormuz.
Sources
- US lifts sanctions on Iranian oil at sea in bid to ease supply pressures
- How Will Easing Iran Sanctions Impact Oil, Inflation, and Crypto Markets?| KuCoin
