The United States has given temporary permission to sell Iranian oil already loaded on ships. US Treasury Secretary Scott Bessent said the approval covers crude oil and petroleum products of Iranian origin that are currently on vessels.

The Treasury Department confirmed that this permission will remain valid until 19 April. Bessent said this step could quickly add about 140 million barrels of oil to global markets. The move aims to ease supply shortages caused by the ongoing conflict.

Shift in Oil Buyers Expected

Before the conflict, China was the main buyer of Iranian oil. It purchased oil at lower prices due to US-led sanctions. Now, the US hopes the waiver will redirect supplies to other countries such as India, Japan, and Malaysia. At the same time, officials expect China may have to pay full market rates instead of discounted prices.

US Maintains Pressure on Iran

Bessent said Iran would struggle to access the money earned from these oil sales. He stressed that the US would "continue to maintain maximum pressure on Iran". However, some experts doubt this claim. They believe it may be difficult to stop Iran from benefiting financially.

Experts Criticise the Decision

David Tannenbaum, director at Blackstone Compliance Services, strongly criticised the move. He told the BBC that the idea was "bananas". "Essentially we're allowing Iran to sell oil, which could then be used to fund the war effort," he said.

Limited Impact on Oil Prices

Many experts said the decision will not significantly change global oil prices. Rachel Ziemba from the Center for a New American Security said, "I don't think it's a game changer and it raises a whole lot of questions."

She added that the US likely does not want Iran’s government to receive this money. However, stopping that in reality could be very difficult. "The US government is definitely in an every-barrel-counts situation because of the scale of the supply shock," she said. "They're looking to find additional oil wherever they can."

Some Support for the Move

Not all reactions were negative. David Malpass supported the step. He said it was a "narrow action that should cause downward pressure on oil prices outside China" and "should also reduce Iran's oil revenue and undercut its military". He also wrote: "This is one in a number of steps last week (including the Jones Act waivers, opening pipelines and building refineries) that will benefit the U.S. and add to long-term energy supplies."

US Takes Additional Steps to Boost Supply

The US has already taken other actions to increase oil supply. These include releasing millions of barrels from its reserves and easing some sanctions on Russian oil. However, the decision to relax restrictions on Russian oil drew criticism from European leaders. They argued it could strengthen Vladimir Putin and extend the war in Ukraine

Strait of Hormuz Disruption Hits Global Supply

The Strait of Hormuz is a key route for global oil transport. Around one-fifth of the world’s daily oil supply passes through it. Since the conflict began in late February, shipping through this route has stopped. Some shipments have been redirected, but experts say the disruption has removed about 10% of global oil supply from the market.

Rising Risks to Energy Infrastructure

The situation remains tense. Ongoing attacks on a major gas field shared by Iran and Qatar have increased concerns. Experts warn that damage to such infrastructure could reduce energy production capacity for years. This risk remains even if the conflict ends soon.

The US decision to allow limited Iranian oil sales aims to ease supply shortages. However, experts remain divided. Some see it as necessary, while others warn it could unintentionally support Iran and have only a small impact on prices.