As the Middle East conflict rages on, the Donald Trump administration may soon remove sanctions from Iranian oil that is stranded on tankers to help lift global supplies and reduce prices, according to US Treasury Secretary Scott Bessent.
“In the coming days, we may unsanction the Iranian oil that’s on the water. It’s about 140 million barrels. So, depending on how you count it, that’s 10 days to two weeks of supply,” the senior official told the country during Fox Business Network’s “Mornings with Maria” programme.
According to Scott Bessent, the addition of sanctioned Iranian oil into global supplies would help keep oil prices down for the next 10 to 14 days. Discussing oil prices, it has been above USD 100 per barrel for much of the past two weeks, with Iran closing the Strait of Hormuz and tankers carrying energy consignments getting attacked frequently.
The United States Treasury has already taken a similar step, by allowing the sale of sanctioned Russian oil stranded in tankers, which has reportedly added 130 million barrels to stretched global supplies.
Scott Bessent noted that the Trump administration would take other actions to increase oil supply, including a unilateral release of stocks from the Strategic Petroleum Reserve above the recent coordinated joint G-7 release of 400 million barrels.
He said the Treasury would “absolutely not try to intervene in oil futures markets, but would take actions to increase physical supplies to try to make up for the 10 million to 14 million barrel-per-day deficit caused by the closure of the Strait of Hormuz.”
“So, to be clear, we’re not intervening in the financial markets. We are supplying the physical markets,” the Treasury Secretary noted, while stating that China had become an “unreliable” supplier of refined products, as it has stopped exporting jet fuel and other products to other Asian countries.
Confirming the news, a Reuters report claimed that if the Trump administration eases sanctions on Iranian oil, one option would be a waiver similar to one used for Russian oil, allowing sales of crude already stranded at sea and confined to a narrow time frame.
“A potential waiver could accelerate the diversion of oil already destined for China into global markets more broadly, helping ensure adequate supply and blunting Iran’s leverage over the Strait of Hormuz,” a source familiar with the US Treasury’s planning told the media outlet.
Meanwhile, Trump lauded Japanese Prime Minister Sanae Takaichi during a White House meeting on March 19 for “really stepping up to the plate” on Iran. The Asian giant has joined European nations, in taking steps to stabilise energy markets, apart from ensuring safe passage for ships through the Strait of Hormuz.