The Treasury Department on Friday temporarily lifted sanctions on Iranian oil that is currently at sea, authorizing it to be sold to most countries. The license applies to oil loaded on vessels as of March 20 and extends until April 19.
Treasury Secretary Scott Bessent previewed the decision on Thursday and estimated that lifting the sanctions would add about 140 million barrels of crude to the oil market. The move follows the easing of sanctions on Russian oil last week. Mr. Bessent said in a post on X that Iran would see little economic benefit from the removal of the sanctions.
“Iran will have difficulty accessing any revenue generated and the United States will continue to maintain maximum pressure on Iran and its ability to access the international financial system,” Mr. Bessent said.
The lifting of Iran oil sanctions after years of imposing “maximum pressure” on Iran’s energy exports underscores the lengths that the Trump administration is prepared to go to reduce global oil prices. Rising gas prices in the United States are a political problem for President Trump and Republicans ahead of the November midterm elections.
It is not clear that the limited lifting of sanctions on Iranian oil will affect global prices. Most Iranian oil is exported to China through its “shadow fleet” of tankers that evade American sanctions.
Energy analysts believe that most of the crude that is already at sea has been bought and accounted for, suggesting that lifting sanctions on that oil will not add a significant amount of additional oil supplies to the market. The sanctions exemptions continue to forbid Iranian oil from being sold to North Korea, Cuba or parts of Ukraine that are occupied by Russia.
The United States does not buy oil from Iran. Mr. Bessent suggested this week that countries such as Malaysia, Singapore, Indonesia, Japan and India could benefit from the sanctions waiver.
It is not clear if international banks will immediately begin facilitating transactions involving Iranian oil.
“I don’t see a scenario where Iranian crude is going to be imported into the U.S.,” said Daniel Tannebaum, a senior fellow at the Atlantic Council, who previously served as the compliance coordinator in the Office of Foreign Assets Control for the Federal Reserve Bank of New York. “Firstly, the available crude is a question as most barrels are already spoken for but also what global bank is financing an Iranian oil trade, legal or otherwise.”
Mr. Bessent said that the United States has worked to bring more than 400 million barrels of oil to the market since the start of the war almost three weeks ago. The additional supply, he said, is “undercutting Iran’s ability to leverage its disruptions in the Strait of Hormuz.”
Alan Rappeport is an economic policy reporter for The Times, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters.
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