US mulls lifting sanctions on stranded Iranian oil

(Sharecast News) - The US is considering lifting sanctions on Iranian oil that has become stranded at sea following the outbreak of war in the Middle East. In an interview with Fox Business on Thursday morning, US Treasury secretary Scott Bessent said that in the coming days, "we may unsanction the Iranian oil that's on the water. It's about 140m barrels or so, depending on how you count it. That's 10 days to two weeks of supply."

The move, he argued, would help ease oil prices, which have soared since the start of March, when the US first attacked Iran.

Since then, hostilities have spread across the Gulf, and many refiners have been forced to shutter production. The vital Strait of Hormuz, through which around 20% of the world's oil supply is normally transported, is now deemed too difficult to pass, leaving numerous tankers stranded at sea.

The US recently allowed the sale of sanctioned Russian oil sitting in stranded tankers, arguing it would help the supply crunch. However, other leaders, including the head of the European Council and the German chancellor, voiced concerns that the move would benefit Moscow and its war efforts in Ukraine. It is thought that the surge in oil prices has brought in around $150m a day in extra revenues for Russia.

As at 1600 GMT, Brent crude was at $110.8 a barrel, while West Texas Intermediate was at $100.23. Brent was trading around $70 at the end of February.

Bessent separately also said on Thursday that the US could release more stock from its strategic petroleum reserve to try to push down prices, but ruled out intervening in oil futures markets. The White House last week ordered the drawdown on 172m barrels from the stockpile, cutting levels to 243m, the lowest since the 1980s.