Key Points
- In the midst of conflict with Iran, the U.S. government has announced permission to sell and deliver Iranian oil currently in circulation at sea.
- They aim to increase global oil supply by about 140 million barrels to curb rising energy prices fueled by the war they initiated.
- This move, offering a significant advantage to Iran, raises questions among experts.
Amid ongoing military tension, Washington made a surprising decision. Under pressure from rising oil prices, the United States authorized on Friday the sale and delivery of Iranian oil and derivatives currently on ships. They hope to curb the surge in energy prices (new window) due to the war in the Middle East, even at the risk of allowing Tehran to increase its revenue through these sales.
This easing of sanctions, announced by the U.S. government’s Office of Foreign Assets Control (OFAC), applies to barrels in circulation on waters before March 20, until April 19. It follows the steep rise in oil prices due to the blockade of the Strait of Hormuz (new window), where 20% of global oil and gas typically pass through, as well as numerous attacks on energy infrastructure (new window) in the Middle East.
Finance Minister Scott Bessent explained in a statement that the Treasury had developed a very narrowly circumscribed, short-term authorization allowing the sale of Iranian oil currently blocked at sea
. He also assured that this decision “does not allow for new purchases or production”
, preempting potential criticisms.
Strategy Debate
By temporarily unblocking this supply, the United States will quickly add around 140 million barrels of oil to the global market, increase the world’s energy supply, and help ease temporary supply pressures due to Iran
, pleaded the American minister.
He even claimed that this strategy should pay off in the long run for Washington. “Specifically, we will use Iranian barrels against Tehran to keep oil prices low while continuing Operation Epic Fury
, the name of the Israeli-American military offensive launched on February 28 against Iran, he emphasized.
Officials assured that this oil was already being shipped to China at a low cost and that the lifting of sanctions would now allow it to be exported to other countries, as reported by the Washington Post (new window). “Iran will struggle to access the resulting revenues, and the United States will continue to exert maximum pressure on Iran
, promised Scott Bessent.
Policy Concerns
However, according to American media, this decision reflects a form of fragility. The Washington Post, in particular, sees it as a boost to Iran’s war effort against the United States
. And highlights the perplexity of many legislators and analysts
, especially since Donald Trump is signaling a possible reduction in operations.
The CNN network also mentions desperate efforts
to increase the amount of oil in circulation. Government officials believe that the increase in oil prices (new window) could persist for several months, citing three sources knowledgeable about internal discussions
. The American administration has mobilized several levers, including releasing hundreds of millions of barrels from its strategic reserves (new window) and easing sanctions on Russian oil (new window) as well, without any impact on price hikes worldwide for now.
Surplus Dispute
Meanwhile, Tehran stated on Friday that it no longer had any surplus crude oil at sea. Currently, Iran actually has no surplus of crude oil at sea or to supply international markets
, and the comments by the U.S. Treasury Secretary are aimed only at giving hope to buyers,” posted X Saman Ghoddoosi, a spokesperson for the Iranian Ministry of Oil.
While waiting for these sanction relief measures to actually take effect, these announcements have already sparked controversy on the domestic political stage. The Trump administration is lifting sanctions on Iranian oil, offering a financial lifeline to the regime as Americans continue to suffer the consequences of Donald Trump’s war
, criticized Democratic Senator Jeanne Shaheen, a member of the Foreign Affairs Committee. Saying the president has no plan is an understatement
, she quipped.
