US may remove sanctions on Iranian oil in tankers, plans to release 140 million barrels to ease supply and lower prices

The U.S. is thinking about removing sanctions on Iranian oil that is stuck in ships at sea. This oil is already loaded in tankers but cannot be sold because of sanctions. U.S. Treasury Secretary Scott Bessent said this step may happen in the next few days. He said around 140 million barrels of Iranian oil are currently “on the water.” He explained that this amount equals about 10 days to 2 weeks of global oil supply. The main goal of this move is to increase oil supply and bring prices down.

Oil prices have been above $100 per barrel recently. Prices went up because Iran closed the Strait of Hormuz and attacked tankers, as stated by Reuters. This closure caused a shortage of 10 to 14 million barrels per day in global supply. Bessent said adding this Iranian oil will help reduce prices for the next 10–14 days. The U.S. recently did something similar by allowing sanctioned Russian oil stuck in ships to be sold. That earlier step added about 130 million barrels to global supply.

US oil supply plan

The U.S. is also planning to release more oil from its Strategic Petroleum Reserve (SPR). This will be extra supply beyond the earlier G7 joint release of 400 million barrels. Bessent clearly said the U.S. will not interfere in oil futures or financial markets. He said the focus is only on adding real physical oil supply in the market. He explained, “We are not touching financial markets, we are supplying the physical market.” The U.S. is also working with other countries to handle the situation.


President Donald Trump is meeting Japan’s Prime Minister Sanae Takaichi, as cited by Reuters. They will discuss protecting ships passing through the Strait of Hormuz. This is important because Japan gets most of its oil from that region. Japan may also release more oil from its own reserves. Bessent said Japan is likely to support efforts to keep oil supply stable. He also said China is becoming an “unreliable” supplier of refined oil products.

China oil exports stop

China has reportedly stopped exporting jet fuel and other products to Asia. Bessent said the U.S. is not attacking Iran’s energy infrastructure despite tensions. He added that the U.S. has actually allowed Iranian oil to continue flowing out of the Gulf, as noted by Investing.com. The government believes there is still more it can do to boost oil supply if needed. Overall, the U.S. strategy is to increase supply quickly to control rising oil prices. Meanwhile, U.S. oil prices are trading at a near $20 discount compared to Brent crude.

FAQs

Q1. Why is the U.S. planning to remove sanctions on Iranian oil?

The U.S. wants to increase global oil supply and lower high prices caused by supply shortages.

Q2. How much Iranian oil is stuck and why does it matter?

Around 140 million barrels are stuck in tankers, and releasing it can help ease the short-term oil shortage.