US Treasury Secretary Scott Bessent on Friday said that Washington is opening up the sale of some Iranian oil and petrochemical products currently stranded at sea, as energy prices shot up amid an escalating conflict between the United States and Iran.
Bessent said in a post on X that his department was issuing a temporary authorisation permitting the sale of the stranded Iranian oil.
“Today, the Department of the Treasury is issuing a narrowly tailored, short-term authorization permitting the sale of Iranian oil currently stranded at sea,” he wrote in a post on X.
What does the licence permit? The US Department of Treasury released a general licence in this regard, authorising sale of Iranian crude oil and petrochemical products loaded onto vessels on or before 12:01 am New York time on 20 March. Such products can be sold through 12:01 am New York time on April 19.
The temporary move comes as the latest effort of the Donald Trump administration to keep oil prices and energy inflation in check. It follows similar measures for Russian oil stuck on the sea due to sanctions in a bid to boost supply as the war in the Middle East escalates.
The licence also permits the safe docking and anchoring of vessels carrying such crude oil or petroleum products.
Why is US allowing Iranian oil? The primary reason why the US is allowing sanctioned Iranian oil is the energy shock that the world is facing right now.
The war that Donald Trump launched against Iran roughly three weeks ago in concert with Israel led to a virtual halt in shipments through the Strait of Hormuz, where 20% of global oil transits. Brent crude prices have surged more than 50% this month as a result.
Scott Bessent also described the move as part of a broader strategy by the Trump administration.
“In response to Iran's terrorist attacks against global energy infrastructure, the Trump Administration will continue to deploy America's economic and military might to maximize the flow of energy to the world, strengthen global supply, and seek to ensure market stability,” he wrote in his post on X.
Giving the rationale behind the move, Bessent said it would help ease supply pressures, adding it will release about 140 million barrels.
“At present, sanctioned Iranian oil is being hoarded by China on the cheap. By temporarily unlocking this existing supply for the world, the United States will quickly bring approximately 140 million barrels of oil to global markets... helping to relieve the temporary pressures on supply caused by Iran,” he said.
Bessent also pointed to broader efforts to boost global energy supply.
“So far, the Trump Administration has been working to bring around 440 million additional barrels of oil to the global market, undercutting Iran's ability to leverage its disruptions in the Strait of Hormuz,” he said.
The global oil benchmark settled Friday above $112 a barrel — the highest level since mid-2022 — before easing in post-settlement trading after Trump said he was considering “winding down” US military efforts against Iran.