The Trump administration is temporarily lifting longstanding sanctions banning the “sale, delivery, or offloading of crude oil or petroleum products of Iranian origin” for the next month in hopes of curbing the meteoric rise in oil prices that has threatened economies across the globe since the start of the U.S.-Israeli war against Iran last month.
A “General License” issued by the Treasury Department’s Office of Foreign Assets Control released late Friday permits the purchase of Iranian oil that has already been loaded onto “any vessel” — including ships that have already been sanctioned — by waiving ten separate sets of sanctions that have targeted both Russian and Iranian oil.
The sanctions that are being temporarily set aside have been in place for years, with many originating during Trump’s first term.
They were imposed to punish Russia for its unprovoked 2022 invasion of Ukraine and other “harmful foreign activities” and to penalize Iran for years of malign activities, human rights violations, support for terrorism and pursuit of weapons of mass destruction.
By waiving the sanctions, the U.S. will allow Iranian and Russian oil that is currently at sea to be purchased and unloaded without penalty until April 19, at which point the sanctions will resume unless the Treasury extends the waiver.
In a post on X announcing the decision, Treasury Secretary Scott Bessent defended it as a “narrowly tailored, short-term authorization” that applies only to Iranian petroleum that is “currently stranded at sea.”
He claimed the sanctions have permitted China to “hoard” Iranian oil “on the cheap” while also suggesting that temporarily relaxing sanctions would inject approximately 140 million barrels into global markets, thereby “expanding the amount of worldwide energy” and relieving what he described as “temporary pressures on supply caused by Iran.”
“In essence, we will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury,” Bessent said.
The Treasury Secretary added that the “temporary, short-term authorization” permitted by his department was limited only to “oil that is already in transit” and would not apply to any new production.
He also claimed that Tehran won’t easily benefit from the sanctions relief because of separate longstanding sanctions cutting off Iranian banks from the global financial system as part of the Trump administration’s “maximum pressure” campaign against the country’s Islamic Republic regime.
Bessent’s announcement comes after days of turmoil in world markets caused by escalating attacks on energy facilities across the Middle East coming from both sides of the war.
The price of Brent crude climbed as high as $119 per barrel and European gas prices briefly surged by 35 per cent on Friday after Iran pounded Qatar’s Ras Laffan energy hub and other Middle Eastern oil and gas infrastructure with missiles.
The Iranian attacks on Qatar came in response to an Israeli strike on the vital South Pars gas field, which drew condemnation from the Gulf states as well as Tehran.
In response, Iranian forces fired missiles at multiple energy sites across the Gulf, including a Saudi oil refinery, Qatari gas facilities and two more oil refineries in Kuwait.
The attacks on oil and gas facilities have led major producers across the Middle East to cut production and shut down facilities to render them less vulnerable to what could be catastrophic strikes that could take years to recover from.
Those supply squeezes have been compounded by Iran’s effective closure of the Strait of Hormuz, a key choke point through which one fifth of the global oil supply must pass each year.
President Donald Trump has spent much of the last week grousing about the supposed unwillingness of NATO member states and other American allies to offer their own naval forces towards protecting tanker traffic from Iranian threats, even as he has repeatedly claimed that the U.S. has “obliterated” much of Tehran’s capabilities.
Earlier on Friday, he wrote on Truth Social that the 32-member defensive alliance was a “PAPER TIGER” and called many of America’s closest allies “COWARDS” for purportedly refusing to heed his demand for assistance.
“Now that fight is Militarily WON, with very little danger for them, they complain about the high oil prices they are forced to pay, but don’t want to help open the Strait of Hormuz, a simple military maneuver that is the single reason for the high oil prices. So easy for them to do, with so little risk,” he said.
Several hours later while en route to Florida aboard Air Force One, he posted again, writing that the U.S. was “getting very close to meeting our objectives” after three weeks of war and said he was considering “winding down” the bombing campaign.
He also suggested that the U.S. does not need to commit any resources towards reopening the Strait of Hormuz because the U.S. is a net exporter of oil even though oil markets are global and a bottleneck in the strait will cause high prices everywhere.
“The Hormuz Strait will have to be guarded and policed, as necessary, by other Nations who use it — The United States does not! If asked, we will help these Countries in their Hormuz efforts, but it shouldn’t be necessary once Iran’s threat is eradicated,” he said.
Despite his suggestions that the U.S. may be “winding down” the war, his is currently weighing the deployment of thousands of additional troops to the Middle East, including a second Marine Expeditionary Unit with as many as 2,200 ground troops embarked on three warships.
At the same time, the Pentagon is seeking an additional $200 billion in order to wage the offensive. The department recently sent the request to the White House, according to a senior administration official. The first six days of the war alone cost more than $11.3 billion, the Pentagon told Congress in a closed-door briefing on March 10.
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