Treasury Secretary Scott Bessent revealed Thursday that the administration is considering a waiver that would redirect Chinese-bound Iranian crude oil to global markets by temporarily lifting sanctions on approximately 140 million barrels of Iranian crude stranded on tankers. Bessent said the redirection would help address oil prices above $100 per barrel caused by Iran’s Strait of Hormuz closure while simultaneously preventing a large volume of Iranian oil from reaching China.
The dual benefit of the proposed waiver — supply relief for global markets and redirection of Iranian oil away from China — has shaped the administration’s framing of the measure. Iran’s Hormuz blockade has removed between 10 and 14 million barrels of daily supply from global markets for close to two weeks, making both the supply benefit and the China redirection dimension strategically relevant.
Bessent confirmed the approximately 140 million barrels of Iranian crude originally heading toward Chinese ports as the oil subject to the proposed waiver. A targeted temporary lifting of sanctions could redirect this supply to global buyers rather than to China, he said, providing roughly two weeks of price support during the US campaign to resolve the Hormuz crisis.
The Treasury has previously implemented comparable redirections, including a waiver for Russian oil that added approximately 130 million barrels to world supply. An additional unilateral US Strategic Petroleum Reserve release beyond the G7’s 400 million barrel commitment is also being planned, while the administration has explicitly ruled out financial market intervention.
Analysts assessed the dual-benefit framing carefully. While acknowledging that redirecting Iranian crude away from China is a secondary geopolitical benefit, compliance professionals and national security analysts warned that the primary strategic cost — enabling Iranian oil revenues for military activities and proxy support — is not offset by the China redirection. Critics argued that the dual-benefit framing adds rhetorical appeal but does not fundamentally change the strategic calculus of enabling an adversary’s oil revenues during an active conflict.