Treasury Secretary Scott Bessent announced the issuance of a narrowly tailored, short-term authorisation permitting the sale of Iranian oil currently stranded at sea. The move marks a stunning reversal of longstanding American policy — and one with a highly uncertain payoff. Oil and gas prices have risen sharply since the war began. The price of Brent crude oil is holding at around USD 112 a barrel, up 53 percent over the past year. UK gas, which was trading at 80p per therm before the crisis, is now around 151p per therm.

Experts say the move is likely to have only a limited effect on prices and could boost funds going to the Iranian regime that the US is attacking. On Friday, Bessent said the permit applied to the sale of crude oil and petroleum products of Iranian origin currently loaded on vessels. The authorisation will last until 19 April, the Treasury Department added. The treasury secretary said the move would quickly bring about 140 million barrels of oil to global markets.

Before the war, China was the primary buyer of oil coming out of Iran, purchasing the barrels at a steep discount due to sanctions imposed by the US and other countries.

In an interview with Fox Business on Thursday, Bessent said a waiver on sales restrictions could help divert more of those supplies to other countries in need of oil, such as India, Japan and Malaysia, while forcing China to pay the “market price”.

Writing on X, Bessent said Iran would have difficulty accessing any revenue generated from the purchase of Iranian oil and that the US would “continue to maintain maximum pressure on Iran”.

However, David Tannenbaum, director of Blackstone Compliance Services — a consultancy specialising in maritime sanctions — told the BBC on Thursday 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.

The waiver is unlikely to have much impact on prices, experts warned.

“I don’t think it’s a game changer, and it raises a whole lot of questions,” said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, a think tank, on Thursday.

Ziemba said she did not believe the US would want money from oil sales to go to Iran’s government — but it could be difficult to prevent in practice.

“The US government is definitely in an every-barrel-counts situation because of the scale of the supply shock,” she added. “They’re looking to find additional oil wherever they can.”

There has also been some positive reaction from financial experts to the Trump administration’s temporary reversal of sanctions on Iranian oil. David Malpass, the former president of the World Bank, said the move 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”.

Writing on X, he added: “This is one in a number of steps taken last week (including Jones Act waivers, opening pipelines and building refineries) that will benefit the US and add to long-term energy supplies.” The US has already undertaken other efforts to boost supply, including the release of millions of barrels of oil from its strategic reserves and the suspension of some sanctions on Russian oil last week. That second decision sparked significant backlash from leaders in Europe, who said it would strengthen President Vladimir Putin’s regime and prolong the war in Ukraine. (BBC)