The US President Trump administration temporarily paused sanctions on Iranian oil at sea for 30 days. But the Iranian negative response sent the global market into shock.
The impact of the ongoing war has led the United States to announce a 30-day sanctions waiver on Iranian oil currently at sea, focusing on easing the current situation over global energy supply as the Middle East conflict continues to escalate.
On Friday, March 20, US Treasury Secretary Scott Bessent announced on X that the waiver could release about 140 million barrels of oil, offering energy market stakeholders a sense of relief and stability amid uncertainty. It is the third time in two weeks that the US has made such a relaxation.
Situation of Iranian shipments
The ships, carrying millions of barrels of crude oil, have been unable to dock at international ports or complete sales because many countries, banks, and shipping companies fear violating US sanctions.
As a result, Iran has struggled to receive payments and fully benefit from its oil exports, leaving tankers floating in international waters, particularly near key routes like the Strait of Hormuz.
In response to the upsurge of global oil prices and supply concerns, the United States has recently allowed limited sales of stranded oil to stabilise the market.
However, the move is temporary and does not remove broader sanctions, leaving the situation uncertain and reflecting the wider geopolitical conflict between the two countries.
Why does the United States offer the sanctions?
Primarily as a short-term measure to stabilise the global oil market amid soaring prices, the United States took action. As a result of the ongoing conflicts in the Middle East and disruptions along key oil routes, such as the Strait of Hormuz, global crude prices rose sharply, creating economic pressure worldwide.
The United States finds a new way to stabilise the current pressure. By allowing Iranian oil to be sold to global markets for a limited period, the US aimed to increase supply quickly, lower fuel costs, and ease surging prices.
These 30-day sanctions were deliberately short and conditional, a period to recover and stabilise. The announcement is a signal from the US that it wants to calm the market, maintain leverage over Iran, and continue restricting normal trade and access to revenues, reflecting a strategic balance between economic stabilisation and political pressure.
Response of the Iranian Ministry
The Iranian Oil Ministry responded by rejecting the US offer, stating that Iran does not have surplus oil available for sale under the 30-day waiver and emphasising that it had not agreed to any such arrangement.
Iran's response has sent shockwaves across the global community. If the situation continues to escalate, persistent supply disruptions could keep crude oil prices high and volatile, leading to increased fuel costs worldwide and further fueling inflation, including added pressure on the US economy.
