Washington: The United States issued a narrow, short-term authorization on Friday night to allow the sale of Iranian oil currently stranded at sea. The Treasury Department and media reports indicate the move aims to boost global supply quickly while maintaining pressure on Tehran.
Treasury Secretary Scott Bessent stated the step will stabilize energy markets amid ongoing conflict and supply disruptions.
“Today, the Department of the Treasury is issuing a narrowly tailored, short-term authorization permitting the sale of Iranian oil currently stranded at sea,” Bessent said.
Key Details of the Authorization
The Treasury general license applies only to crude already loaded on vessels as of March 20 and remains in force until April 19. This move temporarily lifts sanctions on oil already at sea, authorizing its sale to most countries.
Bessent expects the move to bring approximately 140 million barrels of oil to global markets. This surge in supply intends to relieve pressure caused by recent disruptions.
“By temporarily unlocking this existing supply, the United States will quickly expand the amount of worldwide energy,” Bessent added. He emphasized that the measure would not benefit Tehran financially, as the U.S. will continue to restrict Iran’s access to the international financial system.
Strategic Impact and Market Skepticism
The Treasury clarified that the authorization is limited. It prohibits new purchases or additional production and excludes transactions involving certain sanctioned jurisdictions.
Bessent framed the decision within a broader strategy, noting that the administration uses American economic and military might to maximize energy flow and ensure market stability. He pointed out that releasing this oil—some of which China currently “hoards on the cheap”—will undercut Tehran’s leverage.
However, some analysts question the actual impact on prices:
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Pre-sold Cargo: Energy analysts believe buyers have already accounted for much of the crude at sea.
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Banking Hurdles: Experts, including former Treasury official Daniel Tannenbaum, doubt international banks will risk financing these trades, even with a temporary waiver.
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Geographic Reach: While the U.S. does not import Iranian crude, officials suggest nations like India, Japan, Malaysia, Singapore, and Indonesia could benefit from the additional supply.
The move comes as oil prices rise sharply. By allowing already-loaded Iranian crude to flow, the administration seeks to undercut Iran’s ability to leverage disruptions in the Strait of Hormuz.
