Treasury Secretary Scott Bessent confirmed Thursday that the administration is activating the Iranian oil option as part of its emergency response to the Strait of Hormuz crisis, revealing the US may temporarily lift sanctions on approximately 140 million barrels of Iranian crude stranded on tankers in international waters. Bessent said the measure is designed to bring down oil prices that have remained stubbornly above $100 per barrel since Iran’s blockade began.
Iran’s deliberate closure of the Strait of Hormuz has created one of the most disruptive oil supply events in recent global energy history. An estimated 10 to 14 million barrels of daily supply have been removed from global markets, a deficit that has persisted for close to two weeks and has generated economic alarm across oil-importing nations worldwide.
Bessent described the stranded Iranian crude — oil originally heading toward Chinese buyers — as an available emergency reserve that could be unlocked through a targeted temporary sanctions waiver. He estimated the supply would provide roughly two weeks of market relief while the US continues its broader diplomatic and military campaign against the Hormuz blockade.
The Treasury has previously activated a comparable option for Russian oil, issuing a waiver that directed approximately 130 million barrels to world markets. An additional unilateral US Strategic Petroleum Reserve release beyond the G7’s coordinated 400 million barrel commitment is also in development, while the administration maintains its firm opposition to financial market intervention.
Experts and compliance professionals raised immediate concerns. They warned that activating the Iranian oil option — however tactically logical — would generate oil revenues for the Tehran regime that could fund military operations and support regional proxy forces. Critics described the activation as a measure that solves one crisis while potentially deepening another, providing Iran with financial resources to sustain the very conflict that forced the US to consider such an extraordinary supply measure.