The United States has lifted sanctions on some Iranian oil as it tries to control rising global energy prices during its ongoing conflict with Iran.
US Treasury Secretary Scott Bessent announced a short-term and limited authorization that allows the sale of Iranian oil currently stranded at sea. This move marks a major shift in long-standing US policy.
Energy prices have surged since the conflict began. Brent crude oil is trading near $112 per barrel, showing a 53% increase over the past year. UK gas prices have also jumped from 80p to around 151p per therm.
Experts believe the move may have only a limited impact on prices and could also increase financial resources for Iran.
US Allows Limited Iranian Oil Sales to Boost Supply
Bessent confirmed that the authorization applies to Iranian crude oil and petroleum products already loaded on ships. The permission will remain valid until April 19.
The US government expects this move to release around 140 million barrels of oil into global markets. Before the conflict, China was the main buyer of Iranian oil, purchasing it at discounted rates due to sanctions.
Bessent said easing restrictions could redirect oil supplies to countries like India, Japan, and Malaysia, while forcing China to pay full market prices. However, he did not clarify how the US would prevent revenue from reaching the Iranian government.
Some experts criticized the decision. David Tannenbaum, a sanctions expert, warned that allowing Iran to sell oil could indirectly fund its war efforts.
Experts Doubt Impact as Global Supply Crisis Deepens
Analysts say the decision is unlikely to significantly reduce energy prices. Rachel Ziemba, a senior fellow at a US think tank, said the move raises several concerns and may not change the market in a major way.
She added that the US is facing a severe supply shock and is trying to increase oil availability from all possible sources.
The US has already released oil from its reserves and temporarily eased sanctions on Russian oil to stabilize markets. However, this decision faced criticism from European leaders, who argued it could strengthen Russia.
The global oil supply has also taken a hit due to disruptions in the Strait of Hormuz, a key route through which nearly 20% of the world’s oil passes. Since the conflict began, shipping in the area has slowed significantly.
Experts estimate that nearly 10% of the global oil supply has been affected. Ongoing attacks on key gas fields in the region have further raised concerns about long-term energy shortages.
