US Oil Waiver Explained: What It Means for Global Markets

The Trump administration has allowed the sale of Iranian oil and petrochemical products stranded at sea, said US Treasury Secretary Scott Bessent on Friday in a post on X (formerly Twitter). However, Washington has opened up the sale only for a short period of time, that is, for a month. 

The 30-day sanctions waiver will ease global energy supply pressures triggered by the ongoing US-Israel conflict with Iran. “Today, the Department of the Treasury is issuing a narrowly tailored, short-term authorisation permitting the sale of Iranian oil currently stranded at sea,” Bessent wrote in the post.

He clarified that the temporary is “strictly” limited to oil that is already in transit and does not allow new purchases or production. “Further, Iran will have difficulty accessing any revenue generated and the United States will continue to maintain maximum pressure on Iran and its ability to access the international financial system”. 

So far, the Trump administration has been working to bring around 440 million additional barrels of oil to the global market, undercutting Iran’s ability to leverage its disruptions in the Strait of Hormuz.

Why Does the US Allow Oil? 

America’s decision to permit the sale of sanctioned Iranian oil is largely driven by the ongoing global energy crisis. The conflict that Donald Trump started against Iran, alongside Israel, has severely disrupted shipments through the Strait of Hormuz, a key route that handles about 20% of the world’s oil. 

This disruption has pushed Brent crude prices by over 50% in just a month. “In response to Iran's terrorist attacks against global energy infrastructure, the Trump Administration will continue to deploy America's economic and military might to maximize the flow of energy to the world, strengthen global supply, and seek to ensure market stability,” said Bessent. 

He added that the move would help ease supply pressures and will release about 140 million barrels. At present, the US official claimed that sanctioned Iranian oil is being hoarded by China on the cheap. 

“By temporarily unlocking this existing supply for the world, the United States will quickly bring approximately 140 million barrels of oil to global markets... helping to relieve the temporary pressures on supply caused by Iran,” he said, while pointing to broader efforts to boost global energy supply. 

What Does the US Licence Allow?

The US Department of the Treasury has issued a general licence allowing the sale of Iranian crude and petrochemical cargoes that were loaded onto vessels before 12:01 am New York time on March 20. These shipments can be transacted until 12:01 am New York time on April 19.

This temporary step is part of the Donald Trump administration’s broader effort to contain rising oil prices and energy inflation. It mirrors earlier moves involving Russian oil stranded at sea, aimed at easing supply pressures amid escalating tensions in the Middle East.

The licence further allows vessels carrying such oil and petroleum products to dock and anchor safely.

What Is the Current Crude Oil Price? 

On Friday, crude oil prices declined by ₹190 to ₹8,808 per barrel in futures trade as traders weighed the prospects of additional Iranian supply despite lingering geopolitical tensions in West Asia.

On the Multi Commodity Exchange, crude oil for the April delivery ended its three-day rally, declining by ₹190, or 2.11%, to ₹8,808 per barrel in a business turnover of 18,781 lots.

Analysts said the fall in oil prices was driven by hopes of softening geopolitical risk premium following indications of a more pragmatic approach by the US towards Iranian crude supplies.

In overseas trade, West Texas Intermediate (WTI) futures for May delivery fell $1.85, or nearly 2%, to $93.70 per barrel, while Brent Oil for the same month contract slipped 0.34% to trade at $108.28 per barrel in New York.

Going forward, crude oil prices would remain cautiously bearish in the near term, with Brent expected to trade in the range of $90 to 115 per barrel as additional supply potentially enters the market.

Some reports even suggested that oil prices could soar past $180 per barrel if supply disruptions stemming from the US-Israel war on Iran last beyond April.