Treasury Secretary Scott Bessent outlined an unconventional plan Thursday to address spiraling oil prices: temporarily lifting US sanctions on Iranian crude oil currently held on tankers at sea. The proposal, if implemented, would redirect oil originally headed to China into the broader global market as Iran’s Strait of Hormuz blockade continues to drive prices skyward.
Oil prices crossing $100 per barrel have become a significant economic and political concern for the administration, which has been under pressure to respond to the supply disruption caused by Iran’s closure of the world’s most critical oil shipping lane. Bessent’s announcement represents one of the more dramatic steps Washington has considered in response to the crisis.
At the core of the plan are approximately 140 million barrels of Iranian oil that had been en route to Chinese buyers before the current crisis intensified. Bessent said freeing this oil for sale on global markets could provide meaningful supply relief for 10 to 14 days, describing the move as deploying Iran’s own resources against Iran’s economic strategy.
To further offset the supply deficit, Bessent confirmed the US will carry out a unilateral withdrawal from its Strategic Petroleum Reserve on top of the 400 million barrels already released in concert with G7 partners. He insisted the administration’s focus is squarely on physical oil supply and not on any form of intervention in futures markets.
Security and sanctions experts were swift to challenge the wisdom of the proposal. Several analysts noted that allowing Iran to profit from crude sales, even in this limited fashion, could provide the regime with resources to sustain its military campaign and fund allied militant groups across the region. One compliance expert bluntly called the plan irrational, questioning whether the short-term benefit outweighs the strategic risks.