The Trump administration has temporarily lifted sanctions on Iranian oil that is already at sea. Thus, the US hopes to curb the sharp rise in fuel prices. The decision was made against the backdrop of the US-Israel war against Iran. Due to the conflict, shipping in the Strait of Hormuz was disrupted, and the price of oil soared by more than 50% – to $100 per barrel, which has not happened since 2022.
U.S. Treasury Secretary Scott Bessent said the easing would bring about 140 million barrels of oil to global markets and reduce supply pressure. According to him, the measure is temporary and applies only to oil already on its way.
“By temporarily opening access to these existing reserves, the United States will promptly put about 140 million barrels of oil on global markets. This will increase the world’s total energy supply and help alleviate temporary supply shortages,” Bessent wrote on social media. He added that in this way Washington would “use Iranian barrels against Tehran” to keep prices low.
The Strait of Hormuz remains a key issue
The energy infrastructure of Iran and neighboring Gulf states has come under attack, and Tehran has effectively closed the Strait of Hormuz, through which about 20% of the world’s oil and liquefied natural gas supplies pass. Analysts doubt the lifting of sanctions will have much impact on prices as long as the strait remains blocked.
“The weakening of sanctions raises concerns about the rapid depletion of Washington’s economic toolkit to contain oil prices,” said Brent Erickson, managing director of Obsidian Risk Advisors. – If we’ve gotten to the point where we’re easing sanctions on a country we’re at war with, then options are really running out.”
The easing is expected to primarily benefit China, the largest buyer of Iranian oil. U.S. Energy Secretary Chris Wright said supplies could reach Asia within three to four days and reach the market after refining within the next month and a half.
Diplomatic contacts
Meanwhile, Iranian Foreign Minister Abbas Araqchi told a Japanese agency that Tehran has begun talks with Tokyo about possibly opening the strait to passage of Japan-bound ships. The country depends on the Middle East for about 95 percent of its oil supplies, about 90 percent of which pass through the Strait of Hormuz. Japan is among the nations forced to release oil from its reserves amid the price spike.
