US eases sanctions on 140 million barrels of stranded Iranian oil to combat price surge

KEY POINTS

• The US Department of the Treasury issued a general license on Friday allowing the sale of Iranian oil and petrochemicals already loaded onto tankers.

• The waiver is authorized through April 19, 2026, targeting approximately 140 million barrels currently “stranded” at sea.

• Brent crude has surged over 50% this month, with Middle Eastern benchmarks like Murban crude doubling in value due to the virtual halt of shipments through the Strait of Hormuz.

• US Treasury Secretary Scott Bessent stated the move aims to release supply while ensuring Iran has “difficulty accessing any revenue generated.”

MAIN STORY

In a strategic bid to stabilize rocketing energy costs, the United States has authorized the temporary sale of Iranian oil and petrochemical products that were already in transit as of Friday. This latest intervention by the Treasury Department follows a similar move regarding Russian “oil on the water” earlier this month.

The authorization, valid until April 19, is designed to inject immediate liquidity into a global market reeling from an “unprecedented fuel supply crunch” caused by the escalating Middle East war.

The conflict has effectively paralyzed the Strait of Hormuz, a waterway responsible for 20% of global oil transit. With most regional shipments halted, Brent crude recently surpassed $112 a barrel, while UAE’s flagship Murban grade hit record highs near $131–$146. US Treasury Secretary Scott Bessent described the waiver as a “narrowly tailored, short-term authorization.”

He estimated that the move could unlock roughly 140 million barrels, though market analysts at Goldman Sachs place the figure closer to 105 million barrels.

This policy shift highlights the immense domestic pressure on the US government. With November midterm elections approaching, prolonged inflationary pressures and high gas prices are seen as a direct threat to the Republican Party’s ability to maintain control of the Senate and the House.

By releasing these “stranded” barrels, the administration hopes to provide a psychological and physical buffer to the market without officially ending the “maximum pressure” campaign against Tehran.

THE ISSUES

The primary hurdle for this waiver is financial logistics. While the US has widened the pool of potential buyers beyond China’s “teapot” refiners, Iran remains barred from international financial markets. Any new customer will face the massive challenge of structuring payments that do not trigger secondary sanctions. Furthermore, Tehran has disputed the US claims, with oil ministry spokesman Saman Ghodousi asserting that Iran has no “floating crude” and labeling the move a psychological tactic to manipulate market sentiment.

WHAT’S BEING SAID

• “In essence, we will be using the Iranian barrels against Tehran to keep the price down,” said Treasury Secretary Scott Bessent.
• “The US was simply trying to provide psychological support to the oil market,” countered Iranian spokesman Saman Ghodousi.
• “If we’ve reached the point of loosening sanctions on the country we are at war with, we’re really running out of options,” noted analyst Erickson in The Guardian.

WHAT’S NEXT

• Refining Lag: The US Energy Department estimates that if sales proceed, the supply could reach Asian markets within 3 to 4 days, but will take up to six weeks to be refined and impact pump prices.

• April 19 Deadline: Traders will be watching to see if the Treasury extends the license or if this is a one-time “release” to bridge the gap during peak war volatility.
• Operation Epic Fury: The US military is expected to continue its campaign to secure shipping lanes while using these seized or stranded “Iranian barrels against Tehran” to keep global prices capped.

BOTTOM LINE

The Bottom Line is that the US is prioritizing “Price at the Pump” over “Pressure on Tehran.” By allowing 140 million barrels of Iranian oil to enter the market, the administration is making a calculated gamble that easing the global energy shock is more critical to domestic political survival than maintaining a total blockade on Iranian exports.

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