Treasury Secretary Scott Bessent is eyeing Iranian crude oil stranded on tankers as oil markets signal a potentially worsening supply outlook from Iran’s Strait of Hormuz blockade, he revealed Thursday. Bessent said the administration is considering temporarily lifting sanctions on approximately 140 million barrels of Iranian crude in international waters, as market signals suggest the supply impact of the blockade could intensify before it improves.
The worsening supply outlook signals from oil markets reflect growing concern that Iran’s Hormuz blockade, having already removed between 10 and 14 million barrels of daily supply from global markets for close to two weeks, may be sustained longer than initially anticipated. Prices above $100 per barrel have held firm, and market participants are signaling increasing concern about the durability of the disruption.
Bessent confirmed the Iranian crude on tankers, originally destined for Chinese buyers, as a supply resource being considered in response to the worsening market signals. A targeted temporary waiver could redirect approximately 140 million barrels to global buyers, providing roughly two weeks of supply relief while the US campaign to resolve the Hormuz crisis continues.
The Treasury has previously responded to worsening market signals with comparable measures, including a waiver for Russian oil that added approximately 130 million barrels to world supply. An additional unilateral US Strategic Petroleum Reserve release beyond the G7’s 400 million barrel commitment is also in development, while the administration has ruled out any engagement in financial oil market instruments.
Market analysts and policy experts assessed the worsening outlook carefully. Compliance professionals and national security analysts warned that if the market outlook continues to worsen beyond the two-week window of Iranian crude relief, the administration may face pressure to issue additional waivers, potentially creating a prolonged series of Iranian oil revenue enablements that collectively provide the Tehran regime with substantial funds for military activities and proxy support. Critics argued that planning for a worsening outlook requires not just emergency supply measures but accelerated efforts to resolve the Hormuz crisis diplomatically and militarily.