Despite critics calling it self-defeating, Treasury Secretary Scott Bessent confirmed Thursday that the administration is advancing a plan to temporarily lift sanctions on Iranian crude oil stranded on tankers in international waters. Bessent said the approximately 140 million barrels of Iranian crude under consideration would help address the oil price crisis above $100 per barrel caused by Iran’s Hormuz blockade.
The self-defeating criticism centers on the argument that enabling Iranian oil revenues, even temporarily, would provide the Tehran regime with funds to sustain the very activities that led to the Hormuz blockade in the first place. Bessent acknowledged the complexity of the situation but argued that the immediate economic imperative of addressing prices above $100 per barrel justifies the tactical use of Iranian crude.
Bessent confirmed the approximately 140 million barrels of Iranian crude on tankers, originally heading toward Chinese buyers, as the oil in question. A targeted temporary waiver could redirect this oil to global buyers, he said, providing roughly two weeks of price support during the US campaign against the Hormuz blockade.
The Treasury has previously advanced comparable plans despite criticism, including a waiver for Russian oil that contributed approximately 130 million barrels to world supply. An additional unilateral US Strategic Petroleum Reserve release beyond the G7’s 400 million barrel coordinated commitment is also being planned, while the administration has explicitly ruled out any financial market intervention.
Critics who called the plan self-defeating were specific in their analysis. Compliance professionals and national security analysts pointed out that oil revenues from the waiver would flow to the Iranian government, potentially supporting military activities and proxy operations that could threaten the strait’s reopening. Analysts argued that a truly self-defeating plan should not be advanced simply because the immediate alternatives are painful, and called on the administration to develop a supply response that does not simultaneously benefit an adversary.