March 20 (Reuters) – In an effort to address rising oil prices caused by the U.S.-Israeli conflict with Iran, the Trump administration announced a 30-day waiver on sanctions for purchasing Iranian oil at sea. This decision aims to alleviate the pressure on oil prices.
According to Treasury Secretary Scott Bessent, the waiver is expected to introduce approximately 140 million barrels of oil into the global market, thereby easing the strain on energy supplies, as he posted on X.
This action highlights the White House’s concern that the recent increase in oil prices, following nearly three weeks of U.S. and Israeli military actions against Iran, could negatively impact American businesses and consumers ahead of the November midterm elections, where President Donald Trump’s Republican party aims to maintain control of Congress.
THIRD SANCTIONS WAIVER DURING IRAN WAR
The Treasury Department’s website released a license after market hours, stating that Iranian oil could be imported into the U.S. under this waiver, if necessary, to finalize its sale or delivery.
Since the sanctions imposed after the 1979 revolution, the U.S. has not significantly imported Iranian oil, and it remains uncertain if any will enter the country due to this waiver.
Regions such as Cuba, North Korea, and Crimea are excluded from this license, which will be valid until April 19.
This move is expected to benefit China, the leading buyer of Iranian oil. Energy Secretary Chris Wright mentioned that supplies could reach Asia within a few days and enter the market after refining over the next month and a half.
Marking the third instance in just over two weeks, the Treasury Department has temporarily lifted sanctions on oil from adversarial nations. These actions are part of broader efforts to control energy prices, which have exceeded $100 per barrel, reaching the highest levels since 2022.
In a related move, sanctions on Russian oil were also eased earlier, and a general license was issued on Friday permitting the sale of Iranian crude oil and petroleum products loaded on vessels by that day.
Scott Bessent stated, “We will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury.”
He had previously indicated this strategy in a Thursday interview with Fox Business, suggesting that introducing Iranian oil into global supplies could stabilize prices for about 10 to 14 days.
Bessent also noted that Iran would face challenges accessing any revenue from this move, as Washington plans to maintain maximum pressure on Tehran’s access to the international financial system.
‘RUNNING OUT OF OPTIONS’
Oil prices have surged by approximately 50% since the U.S. and Israel commenced their attacks on February 28. In response, Tehran has launched counterattacks on Israel and Gulf states housing U.S. bases.
Key energy infrastructure in Iran and neighboring Gulf states have come under attack, with Iran effectively closing the Strait of Hormuz, a vital passage for about 20% of the world’s oil and liquefied natural gas.
To further manage oil prices, the Trump administration announced a 60-day waiver of the Jones Act shipping law on Wednesday, allowing foreign-flagged vessels to transport fuel, fertilizer, and other goods between U.S. ports temporarily.
Analysts like Brent Erickson, managing principal at Obsidian Risk Advisors, argue that the administration’s measures will not significantly impact prices until the strait reopens to vessels.
“The easing of sanctions raises concerns about Washington’s diminishing economic strategies to curb oil prices,” Erickson stated. “If we’re loosening sanctions on an adversarial nation, our options are truly dwindling.”
The U.S. issued a 30-day waiver for purchasing stranded Russian oil at sea, following a specific license on March 5 for India to buy Russian oil.
Mark Dubowitz, CEO of the Foundation for the Defense of Democracies, a research institute known for its strong stance on Iran, commended the decision.
“We’ve worked on sanctioning Iran’s oil industry for years. This is a smart move … to help win the fight against the regime,” Dubowitz commented on X.
(Reporting by Ismail Shakil and Timothy Gardner; Additional reporting by Jasper Ward and Kanishka Singh; Editing by Chris Reese and William Mallard)
