US Lifts Sanctions on Iranian Oil

The US Treasury Department on March 20 issued a short-term general license authorizing the sale, delivery and offloading of crude oil and petroleum products of Iranian origin that were already loaded on vessels as of 12:01 a.m. eastern daylight time that day.

The authorization runs through 12:01 a.m. on April 19 and covers Iranian-origin oil on any vessel, including those previously blocked under sanctions.

Treasury Secretary Scott Bessent announced the measure, which the department described as narrowly tailored. It aims to release roughly 140 million barrels of Iranian crude currently stranded at sea into global markets.

The move follows weeks of escalating oil prices triggered by disruptions in the Strait of Hormuz during the US-Israeli military campaign against Iran, known internally as Operation Epic Fury.

Bessent said the step would bring immediate supply relief.

"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," he stated in a post on X.

The license explicitly limits its scope to oil already in transit or in floating storage.

It does not permit new production, loading or purchases of Iranian oil.

Transactions remain prohibited if they involve persons or entities in North Korea, Cuba or Russian-occupied regions of Ukraine.

United States itself has not imported meaningful volumes of Iranian oil since the 1979 revolution, though the waiver permits such imports if required to complete authorized sales or deliveries.

This action marks the third temporary sanctions waiver issued by the Trump administration in recent weeks, following a similar step for Russian oil last week.

Bessent emphasized that the measure would not deliver significant economic gains to Iran.

"Iran will have little economic benefit from the temporary removal of the sanctions. 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," he added.

Brent crude prices have climbed more than 50% since the conflict intensified, holding near $112 per barrel in recent sessions, the highest levels since 2022.

The waiver targets oil that might otherwise have been diverted primarily to China at discounted rates, according to administration officials, and redirects potential buyers toward markets in India, Japan and other Asian nations.

Authorization comes as the US continues its military operations against Iranian targets while seeking to mitigate the economic fallout from supply disruptions that have removed roughly 10% of global oil flows from the market.

The core sanctions framework targeting Iran's oil sector and financial system remains fully in place outside this limited, time-bound exception.

The general license, designated Iran General License U, is available on the Office of Foreign Assets Control website and applies to transactions ordinarily incident to the permitted sales, such as vessel docking, crewing, insurance and bunkering services.