The U.S. Treasury Department on Friday authorized the purchase of Iranian oil already loaded on tankers, a move intended to stabilize global energy markets amid escalating tensions in the Middle East. The authorization, effective through April 19, permits the sale of crude oil and petroleum products of Iranian origin currently in transit, according to a statement released by Treasury Secretary Scott Bessent.
The decision represents a significant reversal of longstanding U.S. Policy aimed at restricting Iran’s oil exports. Bessent stated the move would bring approximately 140 million barrels of oil to global markets, seeking to alleviate price pressures exacerbated by the ongoing conflict and disruptions to shipping in the region. The authorization comes after similar recent waivers on sanctions targeting Russian oil, signaling a broader effort by the administration to bolster supply.
The move follows Iraq’s declaration of force majeure at oilfields operated by foreign companies, and recent drone attacks on refineries in Kuwait, both contributing to rising oil prices. Brent crude futures closed at $112.19 per barrel on Friday, a 3.26% increase, whereas U.S. Crude oil settled at $98.32 per barrel, up 2.27%. Saudi oil officials have warned that prices could surpass $180 a barrel if disruptions continue through late April, according to the Wall Street Journal.
While the U.S. Aims to increase supply, concerns have been raised about the potential for the revenue generated from these sales to indirectly fund Iran’s war effort. David Tannenbaum, director of Blackstone Compliance Services, described the move as “bananas,” arguing it could provide Iran with resources to continue its operations. Bessent countered these concerns, emphasizing that the authorization is limited to oil already in transit and does not permit new purchases or production.
Prior to the current conflict, China was the primary purchaser of Iranian oil, benefiting from steep discounts due to existing sanctions. The U.S. Hopes the waiver will divert some of these supplies to other countries, including India, Japan, and Malaysia, while encouraging China to pay market prices. However, Bessent did not detail how this diversion would be enforced or how the U.S. Would prevent funds from flowing back to the Iranian government.
The authorization is a temporary measure, and its effectiveness remains uncertain. The U.S. Treasury has not indicated whether it will extend the waiver beyond April 19, leaving the future of Iranian oil exports and global energy markets in a state of flux.
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