The United States is exploring the possibility of lifting restrictions on some Iranian oil exports as energy prices surge amid the ongoing war in Iran. Treasury Secretary Scott Bessent told Fox Business that a waiver could make around 140 million barrels already at sea available to global buyers, potentially lowering prices for 10–14 days.
Potential effects and concerns
Experts warned that the measure is unlikely to substantially reduce global prices and could inadvertently increase funding for the Iranian regime. David Tannenbaum, director of Blackstone Compliance Services, described the idea as “bananas,” noting that allowing Iran to sell oil risks financing the war effort.
Before the conflict, China was the main purchaser of Iranian oil, often benefiting from steep discounts due to US sanctions. Bessent suggested that the waiver could redirect some of these supplies to countries like India, Japan, and Malaysia, while making China pay market rates.
Limited impact expected
Because the proposed supply is relatively small compared with global demand, analysts said the price effect would be minimal. Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, noted that while the move could add some barrels to the market, it is “not a game changer” and raises questions about enforcement and fund diversion.
Policy context
The proposal comes amid broader US efforts to stabilize energy markets, including releasing oil reserves and suspending some Russian oil sanctions. The latter move drew criticism in Europe for potentially supporting Russia in its war against Ukraine.
Concerns over the Strait of Hormuz
Around 20% of daily global oil supply passes through the Strait of Hormuz. Since the war began in late February, shipping has slowed, removing an estimated 10% of global supply from the market. Escalating attacks on key gas fields in Iran and Qatar could further threaten energy capacity.
US leadership has yet to provide details on measures to prevent funds from oil sales from reaching the Iranian government. President Donald Trump did not clarify whether the proposal would proceed, emphasizing only the goal of keeping energy prices stable.
Also read: Iran war update: Tehran hit, Gulf tensions rise
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