Possible Easing of US Sanctions on Select Iranian Crude

The United States is reportedly considering easing restrictions on certain Iranian oil exports as it grapples with the rising impact of the ongoing conflict in the region on global energy markets.

Treasury Secretary Scott Bessent suggested in a recent interview that allowing some Iranian oil to reach international buyers could help ease tight supply and temporarily lower prices, which have surged amid disruptions to shipping and production caused by the war.

If enacted, such a move would represent a significant shift in longstanding US policy toward Iran, though analysts warn the effects on prices could be limited and that the measure might inadvertently provide funds to the Iranian government.

David Tannenbaum, director at Blackstone Compliance Services, described the proposal as “essentially allowing Iran to sell oil, which could then fund the war effort,” highlighting concerns about the potential risks.

Historically, China has been a major purchaser of Iranian crude, taking advantage of sanctions-induced discounts. Under the new proposal, the US hopes to redirect a portion of these barrels—approximately 140 million already in transit—toward other countries such as India, Japan, and Malaysia, while requiring buyers like China to pay full market rates. Treasury officials did not elaborate on mechanisms to prevent proceeds from reaching Iran’s regime.

President Donald Trump did not provide a definitive response when asked about moving forward with the plan, stating only that the administration would act to “keep the price” stable.

Experts caution that the supply under discussion is relatively small compared to global demand, meaning any impact on prices would likely be modest. Rachel Ziemba, senior fellow at the Center for a New American Security, noted: “It could add a little bit … but I don’t think it’s a game changer, and it raises a lot of questions.”

The proposal follows other US efforts to bolster energy supply, including releases from strategic reserves and a temporary easing of sanctions on Russian oil—a move that drew criticism from European leaders for potentially strengthening Vladimir Putin’s position in Ukraine.

With nearly 20% of the world’s daily oil passing through the Strait of Hormuz—much of it from Iran—the conflict has disrupted shipping routes and removed roughly 10% of global supply from the market. Tit-for-tat attacks on critical energy infrastructure, including Iranian and Qatari facilities, have further raised concerns about long-term impacts on fossil fuel availability.

Analysts say the US is facing a “every-barrel-counts” situation, seeking additional sources of oil wherever possible to offset the shock to global supply. While easing sanctions could provide temporary relief, questions remain about the effectiveness of the move and the potential geopolitical repercussions.