Trump lifts sanctions on Iranian oil

 

The President Donald Trump administration of United States has approved a 30-day waiver on sanctions targeting Iranian oil transactions conducted at sea, a move aimed at calming a sharp rise in global oil prices linked to the ongoing US-Israeli conflict with Iran.

US treasury secretary Scott Bessent said the decision could release roughly 140 million barrels of oil into international markets, easing strain on energy supplies.

The step underscores growing concern within the White House over escalating oil prices, which have surged by about 50% to exceed $100 per barrel — the highest level since 2022.

The spike is seen as a potential burden on American businesses and consumers ahead of the November midterm elections, where Republicans are seeking to maintain control of Congress.

Still, Bessent’s earlier indication that sanctions might be relaxed drew criticism from analysts who warned it could indirectly support Iran’s military campaign.

This marks the third instance in roughly two weeks that Washington has temporarily relaxed sanctions. Earlier measures included easing restrictions on Russian oil, while on Friday the US issued a general licence permitting the sale of Iranian crude and petroleum products already loaded onto vessels from Friday through 19 April, according to a notice on the Treasury’s website.

“By temporarily unlocking this existing supply for the world, the United States will quickly bring approximately 140 million barrels of oil to global markets, expanding the amount of worldwide energy and helping to relieve the temporary pressures on supply caused by Iran,” Bessent said in a statement on X.

“In essence, we will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury.”

According to the licence released after market hours, Iranian oil may be brought into the US under the waiver if required to complete ongoing transactions. However, the US has largely avoided importing Iranian oil since sanctions were imposed following the 1979 revolution.

It remains uncertain whether any Iranian crude will actually reach US shores under the arrangement. The licence excludes certain regions, including Cuba, North Korea and Crimea.

Bessent had earlier raised the possibility of the waiver during a Fox Business interview, prompting analysts to question whether the policy might ultimately benefit Tehran’s war effort.

“To put it mildly, this is bananas,” the Blackstone Compliance Services director, David Tannenbaum, told the BBC. “Essentially, we’re allowing Iran to sell oil, which could then be used to fund the war effort.”

In response, Bessent defended the policy, stressing its limited scope. “This temporary, short-term authorization is strictly limited to oil that is already in transit and does not allow new purchases or production,” he wrote.

“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.”

The decision comes as key energy infrastructure across Iran and neighbouring Gulf states has been targeted, while Tehran has effectively shut the Strait of Hormuz — a vital passage that carries around 20% of the world’s oil and liquefied natural gas.

Experts say the administration’s attempt to stabilise prices may have limited impact until shipping resumes through the strait. Brent Erickson, managing principal at Obsidian Risk Advisors, noted that the move signals dwindling policy options.

“The easing of sanctions raises concerns about the rapid depletion of Washington’s economic toolkit,” to dampen oil prices, Erickson said. “If we’ve reached the point of loosening sanctions on the country we are at war with, we’re really running out of options.”

The policy could also favour China, currently the largest importer of Iranian oil. US energy secretary Chris Wright said shipments could arrive in Asia within days and enter the market after refining over the next several weeks.

Meanwhile, Iran’s foreign minister Abbas Araqchi told a Japanese news agency that discussions had begun with Tokyo on potentially reopening the Strait of Hormuz to vessels linked to Japan.

Japan relies heavily on Middle Eastern oil, sourcing about 95% of its supply from the region, with roughly 90% passing through the strait. The country has already been compelled to tap into its reserves as prices continue to climb.

(GUARDIAN UK)