Treasury Secretary Scott Bessent’s proposal to temporarily waive sanctions on Iranian crude oil stranded on tankers reflects new realities of global oil power that have emerged from Iran’s deliberate Strait of Hormuz blockade, analysts observed Thursday. Bessent revealed the administration is considering the measure to address oil prices above $100 per barrel, as Iran’s demonstrated ability to create market disruption through the strait challenges established assumptions about oil market governance.
The new realities of global oil power highlighted by the Hormuz crisis include Iran’s demonstrated capacity to create a 10 to 14 million barrel daily supply deficit simply by closing a single waterway, and to sustain that deficit for close to two weeks despite significant economic and diplomatic pressure. These new realities have forced the administration into consideration of measures — like the Iranian crude waiver — that the old oil power realities did not require.
Bessent confirmed the Iranian crude on tankers, originally heading toward Chinese buyers, as the supply being considered in response to these new realities. A targeted temporary waiver could redirect approximately 140 million barrels to global markets, providing roughly two weeks of price support while the US campaign to overcome Iran’s new demonstrated power continues.
Earlier responses to the new realities include a Treasury waiver for Russian oil that added approximately 130 million barrels to world supply. An additional unilateral US Strategic Petroleum Reserve release beyond the G7’s 400 million barrel commitment is also being planned, while the administration has explicitly ruled out financial market intervention.
Analysts used the new oil power realities framework to assess the Iranian crude waiver’s implications. They argued that enabling Iranian oil revenues in response to these new realities — providing funds for military activities and proxy support — would effectively validate Iran’s use of oil supply disruption as a geopolitical weapon, potentially encouraging similar tactics from other oil-producing states seeking to demonstrate their own new oil power realities. Critics warned that the administration’s response to Iran’s demonstrated power should deter rather than reward the use of oil supply as a weapon.