Treasury Secretary Scott Bessent broke new ground in US energy policy Thursday by proposing that Washington temporarily remove sanctions from Iranian crude oil stranded on tankers at sea. The measure, designed to address a global oil supply crisis caused by Iran’s Hormuz blockade, would redirect approximately 140 million barrels of Iranian crude from tankers to global markets.
Iran’s closure of the Strait of Hormuz has removed between 10 and 14 million barrels of daily oil supply from global markets for close to two weeks, driving prices above $100 per barrel. The sustained disruption has prompted emergency policy discussions worldwide and has placed intense pressure on the administration to find supply solutions of the right scale and speed.
Bessent said the stranded Iranian oil — originally heading to Chinese ports — could serve as a short-term supply bridge if sanctions are temporarily waived. He estimated the supply would provide approximately two weeks of market relief, during which time the US campaign to reopen the Strait of Hormuz would continue to develop.
The Treasury’s approach draws on a precedent set by a previous waiver for Russian oil that contributed approximately 130 million barrels to global supply. An additional unilateral US Strategic Petroleum Reserve release beyond the G7’s 400 million barrel coordinated commitment is also in the pipeline, while the administration has ruled out financial market intervention.
Experts from the sanctions and security communities challenged the proposal. They argued that any oil revenue flowing to Tehran, even within a narrow temporary waiver, would provide financial resources for the Iranian regime’s military activities and proxy support. Critics described the plan as an innovative but strategically risky approach to an extraordinary supply crisis, one that could have lasting implications for the US-Iran sanctions regime.
