New York [US], March 22: As the cost of oil continues to soar, the US Treasury Department on Friday lifted sanctions on 140 million barrels of Iranian crude already loaded onto vessels, which the Trump administration says will help ease prices - but which is also likely to provide revenue for Iran's war effort.
The order to "unsanction" the oil comes as US President Donald Trump's war in Iran has triggered a global energy crunch, with the price of oil soaring more than 50 percent since the USattacked Iran late last month.
"Today, the Department of the Treasury is issuing a narrowly tailored, short-term authorization permitting the sale of Iranian oil currently stranded at sea," Treasury Secretary Scott Bessent wrote Friday night on X.
"By temporarily unlocking this existing supply for the world, the United States will quickly bring approximately 140 million barrels of oil to global markets, expanding the amount of worldwide energy and helping to relieve the temporary pressures on supply caused by Iran."
Administration officials argue that such oil is already making its way to China at a discount, and lifting the sanctions will allow it to flow to other nations.
"Iran will have difficulty accessing any revenue generated and the United States will continue to maintain maximum pressure on Iran and its ability to access the international financial system," Bessent wrote.
But the action was met with bewilderment by many lawmakers and analysts, who said it will provide the Iranian regime a cash infusion as it actively tries to kill US soldiers on the battlefield.
"This move directly contradicts Trump's own statements that the United States is considering winding down this conflict," said Brett Erickson, managing principal at Obsidian Risk Advisors, which specializes in financial crime and regulatory issues. "You don't unsanction Iranian oil if you're winding down. This is the action of an administration that has no exit ramp and knows it. The word for that is desperation."
Erickson questioned whether the action will have much of an impact on oil prices. Europe still has sanctions on Iranian oil, he said, and the firms that purchase it would still be taking a considerable risk. "The market knows this," he said.
"That's why prices are unlikely to be impacted significantly."
Analysts who have advised the administration on sanctions and economic policy publicly defended the move. Former World Bank President David Malpass, a Trump nominee who was a senior Treasury official in the president's first term, predicted on X that it would "cause downward pressure on oil prices outside China" and "reduce Iran's oil revenue and undercut its military."
The lifting of restrictions on the Iranian oil underscores how the administration has few tools to keep oil prices down. It has already authorised the release of a massive amount of oil from the US Strategic Petroleum Reserve, lifted sanctions on Russian oil already at sea and temporarily waived the Jones Act, which prohibits shipments of oil between US ports on foreign-flagged vessels.
The price of oil has continued to increase despite these actions, as Iranian attacks paralyze oil tankers in the Persian Gulf and critically damage crucial production facilities in the Middle East.
Source: Qatar Tribune
