The Trump administration temporarily lifted sanctions on Iranian oil at sea amid rising prices
The U.S. Treasury Department has approved purchases of Iranian oil already in the ocean, freeing buyers from tough sanctions that have limited the country’s oil industry for years – a move aimed at lowering prices amid the U.S.-Iran war.
The sanctions license allows oil from Iran to be purchased once it is loaded onto a vessel at 12:01 a.m. ET on Friday. The authorization lasts until April 19. They do not include people in North Korea, Cuba or parts of Ukraine controlled by Russia.
Treasury Secretary Scott Bessent said Friday the move could free up an estimated 140 million barrels of oil that would otherwise have been “hoarded by China on the cheap,” referring to China’s status as Iran’s biggest oil buyer.
“In fact, we will use Iranian barrels against Tehran to keep the price down as we continue with Operation Epic Fury,” Bessent said in a statement, citing it as a way to “increase the amount of global energy and help alleviate short-term supply pressures caused by Iran.”
Bessent argued that Iran would not be able to access much of the revenue from the sale, writing that “the United States will continue to maintain significant pressure on Iran and its ability to access the international financial system.”
But the move — which Bessent telegraphed earlier this week — still signals a loosening of President Trump’s “high pressure” plan against Iran, which dates back to his first term and includes severe sanctions making it difficult to do business across Iran’s economy, including its energy industry.
Last week, the US and greenlit purchase of Russian oil that has been at sea for one month, a withdrawal from the severe sanctions that have crippled the Russian economy since the country’s full-scale invasion of Ukraine.
The moves are controversial. Congressional Democrats have strongly criticized the Trump administration for loosening sanctions on Russian oil, saying the decision could be a blow to Russian President Vladimir Putin.
“The new escape channels the President is opening, coupled with high energy prices around the world, are giving Putin enormous financial leverage and the means to continue his bloody war in Ukraine,” Senate Minority Leader Chuck Schumer and other Senate Democrats said in a joint statement earlier this month.
The Trump administration is dealing with rising oil prices because of the war with Iran. Shipping in the Strait of Hormuz – the bottleneck between Iran and the Arabian Peninsula that carries about 20% of the world’s oil – has slowed to a trickle as oil tanker drivers fear an Iranian attack, making it difficult for major Arab oil producers to export oil. But Iran has allowed its oil exports to pass through the Strait.
The lifting of sanctions is intended to reduce oil prices by at least temporarily increasing supply. Mr. Trump has done it he tried a few other strategiesincluding orders the release of 172 million barrels of oil from the Strategic Petroleum Reserve, and allowing foreign vessels to move oil between US ports.
But so far, prices remain near multi-year highs.
Mr. Trump has also floated offering military escorts to tankers in the Strait of Hormuz, although on Friday, he said he wanted other countries to participate in any potential escort operation as the US became less dependent on Middle Eastern oil.
“If asked, we will assist these countries in their Hormuz efforts, but it should not be necessary once the threat from Iran has been eliminated,” the president wrote on Truth Social.
Meanwhile, the petroleum industry aims in both Iran and Arab countries allied with the US were attacked during the war. Last week, Mr. Trump he ordered strikes on military targets on Kharg Island, which serves as an oil depot for Iran, and threatened to strike oil-related targets there if Iran interferes with the Strait of Hormuz.
Asked by reporters on Friday if he has a plan for Kharg Island, Mr. Trump said: “I’m not going to tell you that. It’s definitely a place people are talking about, but I’m not going to tell you that.”
