U.S. Allows 30-Day Sale Of Iran Oil At Sea In Bid To Tame Prices
On March 20, the Trump administration announced a 30-day waiver on sanctions for the purchase of Iranian oil at sea in an effort to alleviate rising oil prices due to the U.S.-Israeli conflict with Iran.
Treasury Secretary Scott Bessent stated that this waiver will add approximately 140 million barrels of oil to the global market, easing the strain on energy supply.
This decision was driven by concerns that escalating oil prices, a result of recent military actions against Iran, could negatively impact U.S. businesses and consumers leading up to the November midterm elections.
THIRD SANCTIONS WAIVER DURING IRAN WAR
The Treasury Department’s license allows for the import of Iranian oil into the United States under the waiver when necessary for sale or delivery purposes.
Although the U.S. has not historically imported Iranian oil, it remains uncertain if any Iranian oil will actually reach American shores as a result of this waiver.
Excluded regions from this license include Cuba, North Korea, and Crimea, with the waiver set to expire on April 19.
This move is expected to benefit China, the largest buyer of Iranian oil, with Energy Secretary Chris Wright noting that supplies could reach Asia within a few days and enter the market after refinement over the next month and a half.
This marks the third instance in recent weeks where the Treasury Department has temporarily waived sanctions on oil from U.S. adversaries, all part of efforts to stabilize energy prices that have surged above $100 a barrel.
Additionally, the U.S. has eased sanctions on Russian oil and issued a general license on Friday permitting the sale of Iranian crude oil and petroleum products loaded on vessels by the end of the week.
Treasury Secretary Bessent explained, “We will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury.”
Bessent had hinted at this decision in an interview with Fox Business, stating that releasing sanctioned Iranian oil into global supplies would help stabilize oil prices for a limited period.
He emphasized that Iran would face challenges in accessing any revenue generated from this move, and the U.S. would maintain pressure on Iran’s financial dealings.
‘RUNNING OUT OF OPTIONS’
Since the U.S. and Israel initiated military actions against Iran on February 28, oil prices have surged by approximately 50%. In response, Iran has targeted Israel and Gulf states hosting U.S. bases.
Key energy infrastructure in Iran and neighboring Gulf states has been attacked, leading Iran to effectively close the vital Strait of Hormuz, responsible for 20% of global oil and gas transportation.
To address rising oil prices, the Trump administration recently announced a 60-day waiver of the Jones Act shipping law, allowing foreign-flagged vessels to transport fuel and goods between U.S. ports temporarily.
Energy analysts, including Brent Erickson of Obsidian Risk Advisors, believe that these efforts to control prices will only have a significant impact once the Strait of Hormuz is reopened to vessel traffic.
Erickson expressed concerns over the potential depletion of Washington’s economic strategies to curb oil prices, stating, “If we’ve reached the point of loosening sanctions on the country we are at war with, we’re really running out of options.”
The U.S. also granted a 30-day waiver for countries to purchase Russian oil stranded at sea, following a specific 30-day license issued on March 5 for India to buy Russian oil.
Mark Dubowitz, CEO of the Foundation for the Defense of Democracies, commended the decision, noting it as a strategic move in the ongoing effort to counter Iran.
(Reporting by Ismail Shakil and Timothy Gardner; Additional reporting by Jasper Ward and Kanishka Singh; Editing by Chris Reese and William Mallard)
