US sanctions waiver frees 140M barrels of Iranian oil
Thirty-day Treasury license aims to cool oil prices near $120 as Strait of Hormuz disruptions constrain global supply
The United States has issued a 30-day waiver authorizing the sale of approximately 140 million barrels of Iranian crude oil held in floating storage, a move designed to alleviate supply pressures that have pushed global oil prices to their highest levels in four years.
The general license, issued by the US Treasury on March 20, permits the sale of Iranian petroleum products already loaded on vessels through April 19. The authorization comes as Brent crude has surged above $100 per barrel, peaking at $126 in recent weeks amid escalating conflict between the US, Israel, and Iran.
"By temporarily unlocking this existing supply for the world, the United States will quickly bring approximately 140 million barrels of oil to global markets," Treasury Secretary Scott Bessent said in a statement. The Iranian oil currently stranded at sea represents roughly 10 to 14 days of global supply.
The waiver is the third temporary sanction easing announced by Washington in approximately two weeks, following previous measures related to Russian oil. The intervention aims to counteract severe disruptions to shipping through the Strait of Hormuz, a vital maritime choke point through which approximately 20% of the world's daily oil supply normally passes. Since late February, transits through the strait have collapsed by 94.2%, creating what analysts describe as the largest disruption to global energy supply since the 1970s energy crisis.
"In essence, we will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury," Bessent said, referring to the ongoing military campaign. The Treasury Secretary emphasized that the authorization is "strictly limited to oil that is already in transit and does not allow new purchases or production," and that Iran will face difficulty accessing any revenue generated from the sales.
The sudden influx of supply could cap near-term upside for energy sector equities despite the historically elevated price environment. Oil companies have rallied significantly in recent weeks as prices surged, but the Treasury's intervention introduces fresh uncertainty about the sustainability of current pricing levels.
Not all industry observers are convinced of the strategy. David Tannenbaum of Blackstone Compliance Services called the move "bananas," warning it could inadvertently allow Iran to fund its war efforts despite the Treasury's revenue restrictions.
The waiver's 30-day window creates a compressed timeline for markets to absorb the additional supply. Analysts will be watching closely to determine whether the Iranian barrels reach market quickly enough to temper prices before the authorization expires in mid-April, or whether the underlying supply disruptions from the Strait of Hormuz crisis will continue supporting elevated oil prices through the spring.