Treasury Secretary Scott Bessent dropped a significant policy signal Thursday, revealing that the Trump administration is considering lifting sanctions on Iranian oil currently held on tankers at sea. The move is aimed at flooding global markets with additional supply in response to a sharp rise in oil prices following Iran’s blockade of the critical Strait of Hormuz shipping route.
Iran’s closure of the Strait of Hormuz has removed between 10 and 14 million barrels per day from global circulation, pushing oil prices above $100 per barrel for much of the past two weeks. The strait is one of the world’s most vital maritime corridors, and its blockade has sent shockwaves through energy markets globally, threatening supply chains from Asia to Europe.
Speaking on Fox Business Network, Bessent said the administration views the 140 million barrels of sanctioned Iranian oil — previously destined for China — as a strategic tool. He described it as using “Iranian barrels against the Iranians” to keep prices manageable during what he projected would be a 10 to 14-day window while the US continues its military and diplomatic campaign.
The Treasury’s broader toolkit also includes a unilateral drawdown from the Strategic Petroleum Reserve beyond what was already agreed upon in a coordinated G7 release last week. Bessent made clear the government intends to address the oil shortage through physical supply mechanisms rather than any intervention in financial derivative markets.
Experts, however, are far from convinced. Sanctions specialists warned that allowing Iran to profit from oil sales — even stranded oil — could directly fund the regime’s military activities and proxy operations. The short-term price relief, they argued, may come at a significant long-term strategic and geopolitical cost.