US may remove sanctions on Iranian oil as officials in the United States consider releasing stranded crude supplies to stabilize markets disrupted by tensions around the Strait of Hormuz.
The proposal, discussed by treasury secretary Scott Bessent, involves allowing roughly 140 million barrels of Iranian oil already at sea to enter global markets temporarily.
This move comes as oil prices surge above $100 per barrel following disruptions linked to Iran’s actions in the Gulf and its effective closure of the strategic shipping route.
Officials argue the measure could provide immediate relief by boosting supply, offsetting a daily deficit estimated between 10 and 14 million barrels caused by halted shipments.
Bessent explained the approach as a tactical move, saying the US would “use the Iranian barrels against the Iranians” to stabilize prices in the short term.
The policy is being considered under the administration of Donald Trump, which has been balancing economic pressures at home with escalating geopolitical tensions abroad.
Energy analysts say the release could act as a temporary buffer, easing panic in markets that have reacted sharply to uncertainty in Middle Eastern oil flows.
However, critics warn the plan could unintentionally strengthen Iran by allowing it to profit from oil sales, potentially funding its government and regional activities.
One expert described the proposal bluntly, stating, “Essentially, we’re allowing Iran to sell oil, which could then be used to fund the war effort.”
Another analyst added that while the measure might calm markets briefly, it does not address the underlying geopolitical risks driving the current crisis.
The US previously used a similar approach with Russian oil, temporarily allowing stranded shipments to enter markets to prevent supply shocks during earlier global disruptions.
In this case, officials are considering a limited waiver that would apply only to oil already on tankers, preventing Iran from expanding production under relaxed restrictions.
Such a waiver would likely redirect shipments initially intended for China into broader international markets, diversifying supply and reducing dependency on restricted routes.
The strategy is also intended to weaken Iran’s leverage over the Strait of Hormuz, a chokepoint through which a significant portion of global oil trade passes.
Despite these intentions, some economists argue the policy sends mixed signals, simultaneously sanctioning Iran while enabling it to generate revenue from oil exports.
Supporters counter that the urgency of stabilizing global oil prices outweighs longer-term concerns, particularly as inflation pressures mount in energy-dependent economies.
The US is also exploring additional measures, including releasing reserves from its Strategic Petroleum Reserve to further increase available supply.
This would build on coordinated actions by G7 nations, which recently released hundreds of millions of barrels to cushion the impact of supply disruptions.
Bessent emphasized that the administration is not intervening in financial markets but instead focusing on increasing physical oil supply to meet demand.
He noted that ensuring adequate supply is critical to preventing further price spikes that could ripple across global economies and impact consumers directly.
Oil traders remain cautious, however, as the broader geopolitical situation involving Iran continues to evolve unpredictably.
The situation is closely tied to wider tensions in the Middle East, where military and economic pressures are intersecting in complex ways.
Some observers warn that short-term fixes like sanction waivers may delay but not prevent further volatility if the underlying conflict escalates.
Others argue that even temporary relief could buy time for diplomatic efforts aimed at reopening shipping lanes and restoring stability in the region.
The debate highlights the difficult balance policymakers face between economic stability and geopolitical strategy in times of crisis.
For global markets, the immediate question remains whether additional supply can meaningfully offset disruptions caused by restricted access to key النفط transit routes.
Meanwhile, energy-importing nations are watching closely, as prolonged high prices could strain budgets and slow economic recovery efforts worldwide.
In the longer term, analysts suggest the crisis may accelerate shifts toward alternative energy sources and diversified supply chains to reduce reliance on volatile regions.
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For now, the focus remains on short-term stabilization, with the US weighing whether easing sanctions could provide the quickest path to calming markets.
The coming days will be crucial as policymakers decide whether to proceed with the plan and how it might reshape both oil markets and geopolitical dynamics.
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