After Russia, now US to waive sanctions on Iranian oil on the waters: Treasury Secretary Scott Bessent

The US Treasury Secretary Scott Bessent said that the United States will unsanction around 140 million barrels of Iranian oil that is on the cargo ships.

US Treasury Secretary Scott Bessent has said that to stabilise global oil prices, America will now unsanction Iranian oil that is out there in the sea. Speaking to Fox News, Bessent said that the US has anticipated a temporary choke point at the Strait of Hormuz and has worked in coordination to stabilise oil prices.

“This is a coordinated effort. We had to break the glass....We knew there were around 130 billion barrels of Russian oil on the water and we unsactioned it and created a supply that is beyond the Straits of Hormuz. So, we anticipated this. We knew there could be a temporary choke point there (Hormuz),” said Bessent.

The US treasury secretary further said that the United States will unsanction around 140 million barrels of Iranian oil that is on the cargo ships.

“In the coming days, we may unsanction the Iranian oil that's on the water. It's about 140 million barrels, so depending on how you count it, that's 10 days to 2 weeks of supply, which the Iranians had been pushing out, that would have all gone to China. In essence, we'd be using the Iranian barrels against the Iranians to keep the price down for the next 10 or 14 days, as we continue this campaign,” said Bessent, hinting that the Iran war may continue for two more weeks. 

He said that the US has lots of levers against the Iranians. He said that some countries are going to do more to ease the oil prices. “The US could unilaterally do another Strategic Petroleum Reserve (SPR) release to keep the price down. WTI and its European counterpart, Brent, have substantially diverged over the past few trading sessions. They were trading right on top of each other last week, and this is because the US,” he said.

Notably, Iran has blocked the Strait of Hormuz following the US-Israel’s joint attack on February 28. The Strait of Hormuz is a crucial trade route, especially for crude oil, natural gas and construction materials. 

The Strait is only about 33 km wide at its narrowest, and shipping lanes are even narrower. Around 20% of the world’s oil passes through this narrow stretch of water.