Treasury Secretary Scott Bessent proposed a counterintuitive strategy Thursday: redirecting Iranian oil stranded on tankers to global markets as a way of neutralizing Iran’s effort to use the Strait of Hormuz closure to drive up energy prices. Bessent announced the administration is considering temporarily lifting sanctions on approximately 140 million barrels of Iranian crude in international waters.
Iran’s Hormuz blockade has created a significant daily oil supply shortfall, estimated at between 10 and 14 million barrels, and has pushed crude prices above $100 per barrel for close to two weeks. The sustained disruption has created broad economic challenges for oil-importing countries and has put pressure on Washington to find rapid and effective supply solutions.
Bessent described the stranded Iranian crude, originally destined for Chinese ports, as a strategic asset that could be temporarily unlocked to provide approximately two weeks of global supply relief. He framed the move as turning Tehran’s own resources against its economic warfare strategy, using Iranian oil to blunt the price impact of the Hormuz closure.
The Treasury has previously applied a similar mechanism to Russian oil, adding approximately 130 million barrels to world supply. An additional unilateral US Strategic Petroleum Reserve release beyond the G7’s 400 million barrel commitment is also in development, alongside a firm stance against financial market intervention.
Critics from the sanctions and security communities challenged the proposal’s strategic coherence. They argued that enabling Iran to sell its oil, even under the most limited waiver, would provide the Tehran government with oil revenues that could support military campaigns and regional proxy operations. Analysts warned that the plan’s short-term market benefit is outweighed by the long-term risk of financially empowering an adversary during an active geopolitical conflict.