U.S. Allows 30-Day Sale of Iranian Oil at Sea in Bid to Ease Prices

Reuters

U.S. treasury secretary Scott Bessent.

The United States has authorised a temporary 30-day waiver permitting the sale of Iranian oil stranded at sea, as part of efforts to curb rising global energy prices driven by the conflict involving Iran.

The waiver will bring some 140 million barrels ‌of oil to global markets and help relieve pressure on energy supply, Treasury Secretary Scott Bessent posted on X.

The move reflects White House worries that the surge in oil prices after nearly three weeks of U.S. and Israeli strikes on Iran will hurt U.S. businesses and consumers ahead of the November midterm elections.

The license, posted to the Treasury Department's website after market hours, says Iranian oil can be imported into the United States under the waiver when necessary to complete its sale or delivery.

The U.S. has not meaningfully imported Iranian oil since sanctions were imposed following the Iranian Revolution. It remains unclear whether any Iranian crude will reach U.S. markets under the latest waiver measures.

The licence, which will remain in effect until 19 April, excludes regions such as Cuba, North Korea, and Crimea.

The move is expected to primarily benefit Asian markets, which are the largest consumers of Middle Eastern oil. U.S. Energy Secretary Chris Wright said supplies could reach Asia within three to four days and enter the market after refining over the following six weeks.

Independent Chinese refiners have remained the main buyers of sanctioned Iranian oil, taking advantage of discounted prices. Prior to the reimposition of U.S. sanctions in 2018, countries including India, South Korea, Japan, Italy, Greece, Taiwan, and Turkey were also major importers of Iranian crude.

This marks the third time in just over two weeks that the U.S. Treasury Department has temporarily eased sanctions on oil from geopolitical rivals, as part of efforts by the administration of Donald Trump to contain energy prices, which have surged above $100 per barrel to their highest levels since 2022.

Previously, Washington had also relaxed restrictions on Russian oil, and on Friday issued a general licence allowing the sale of Iranian crude oil and petroleum products that had been loaded onto vessels before the specified deadline.

"In essence, we will be using the Iranian barrels against Tehran to ‌keep the price ⁠down as we continue Operation Epic Fury," Bessent said.

Bessent had telegraphed the move in an interview with Fox Business on Thursday, saying the release of the sanctioned Iranian oil into global supplies would help keep oil prices down for 10 to 14 days.

He said on Friday that Iran will have difficulty accessing any revenue generated by the move and Washington will maintain maximum pressure on Iran and its ability to access the international financial system.

Oil prices have risen by around 50% since the United States and Israel launched attacks on 28 February, intensifying instability across the Middle East. Iran has responded with strikes on Israel and Gulf states hosting U.S. bases, further escalating tensions.

Key energy infrastructure in Iran and neighbouring Gulf countries has been targeted, while Iran has effectively closed the Strait of Hormuz — a critical route for approximately 20% of global oil and liquefied natural gas supplies — raising serious concerns over global energy security.

In an effort to stabilise oil markets, the administration of Donald Trump announced a 60-day waiver of the Jones Act, temporarily allowing foreign-flagged vessels to transport fuel, fertiliser and other goods between U.S. ports.

Separately, the United States issued a 30-day waiver permitting countries to purchase sanctioned Russian oil that had been stranded at sea, following the expiry of a previous licence on 5 March that had specifically allowed India to import Russian crude.

Source: Reuters



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