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

The Trump administration lifted sanctions on offshore Iranian oil purchases for 30 days to ease the surge in oil prices caused by the US-Israeli war against Iran.

U.S. Treasury Secretary Scott Bessent said the waiver would bring about 140 million barrels of oil to global markets and help relieve pressure on energy supplies.

The move reflects the White House’s concern that soaring oil prices – up about 50% to more than $100 a barrel, the highest since 2022 – will hurt U.S. businesses and consumers ahead of November’s midterm elections, when Republicans hope to retain control of Congress.

However, Bessent’s previous suggestion of a waiver raised concerns that it could benefit Iran’s war effort.

This is the third time the United States has temporarily lifted sanctions in about two weeks.

It previously eased sanctions on Russian oil and on Friday issued a general license authorizing the sale of Iranian crude oil and petroleum products loaded on ships from Friday until April 19, according to the license posted on the U.S. Treasury website.

“By temporarily releasing this existing supply to the world, the United States will quickly bring approximately 140 million barrels of oil to global markets, thereby increasing the amount of global energy and helping to relieve temporary supply pressures caused by Iran,” Bessent said in a statement on X.

“In essence, we will use Iranian barrels against Tehran to keep prices low while continuing Operation Epic Fury. »

The license, posted on the Treasury’s website after market hours, said Iranian oil could be imported into the United States under the waiver when necessary to complete its sale or delivery. The United States has not imported significant 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 discussed lifting sanctions in an interview with Fox Business on Thursday, prompting analysts to point out that the policy could actually benefit Iran’s war effort.

“To say the least, it’s bananas,” David Tannenbaum, director of Blackstone Compliance Services, told the BBC. “Essentially, we are allowing Iran to sell oil, which could then be used to finance the war effort.”

Bessent pushed back on that analysis in his Friday statement. “This temporary and short-term authorization is strictly limited to oil already in transit and does not allow new purchases or production,” he wrote.

“Iran will have difficulty accessing the revenues 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 neighboring Gulf states has been attacked, and Iran has effectively closed the Strait of Hormuz, a conduit for approximately 20 percent of the world’s oil and liquefied natural gas.

Energy sector analysts, including Brent Erickson, managing director at Obsidian Risk Advisors, said the administration’s efforts to control prices would not have a significant impact until the strait is open to ships.

“The easing of sanctions raises concerns that Washington will quickly exhaust the economic tools it has” to rein in oil prices, Erickson said. “If we manage to ease sanctions on the country we are at war with, we will really be out of options.”

This decision should benefit China, the largest buyer of Iranian oil. U.S. 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, Iranian Foreign Minister Abbas Araqchi told a Japanese news agency that Tehran had started discussions with Tokyo on a possible opening of the strait to allow the passage of ships linked to Japan.

Japan depends on the Middle East for about 95% of its oil supplies and receives about 90% of its oil shipments through the strait. Japan is one of the countries forced to draw oil from its reserves due to rising prices.