Trump administration loosens sanctions on Iran in latest bid to contain oil prices

The Trump administration on Mar. 20 lifted sanctions on some Iranian oil as it struggles to contain the energy price and supply impacts of the Iran war.

Sales are limited to Iranian-origin crude and crude products already loaded on vessels, including tankers that are blocked under sanctions. The sanctions relief runs until Apr. 19.

Treasury Secretary Scott Bessent, in a statement on X, said the move would quickly bring about 140 million bbl of oil to the market.

“In essence, we will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury,” by “expanding the amount of worldwide energy and helping to relieve the temporary pressures on supply caused by Iran,” he said.

Sanctions shift underscores pressure to rein in prices

The move marks a major reversal in the Trump administration’s stated strategy of “maximum pressure” against Iran through heavy sanctions. Some experts say the easing of sanctions is likely to have a limited effect on prices, and that sales revenue from the oil could be used by the regime against the US and Israel.

Bessent argued that Iran won't be able to access much of the proceeds from the sales, writing that “the United States will continue to maintain maximum pressure on Iran and its ability to access the international financial system.”

US sanctions on Iran oil and the embargo on Iranian goods began in 1979 shortly after the seizure of the US Embassy in Tehran. While Washington has lifted or relaxed sanctions on a few occasions, the ban on Iranian energy has been largely in place since 1987.

“The deep historical context surrounding [the easing of Iranian sanctions] reinforces our sense that the US may be on, or approaching, the other side of “peak sanctions,” Washington, DC-based ClearView Energy LLC said in a client note Mar. 22.

The change also signals the depth of the administration’s concern about prices, the research group said.

The shift could also signal the administration’s deepening concerns about inflation. “Given reputational consequences, it seems far from clear that American entities will seize the opportunity to buy (or, perhaps more importantly, finance transactions in) Iranian barrels. But to the degree that [the Iranian sanctions relief] provides for the possibility that they might—or that they might need to—it might seem a bull signal,” the research group wrote.

The White House has taken several actions in recent weeks to address skyrocketing energy prices. The US Department of Energy, as part of a coordinated action with the International Energy Agency, announced the release of 172 million bbls of crude from its Strategic Petroleum Reserve. Washington also temporarily waived the Jones Act, giving foreign vessels the ability to deliver fuel to US ports. The administration has also ordered a California offshore pipeline restarted and allowed an LNG plant to increase exports in response to the war-related prices spikes.