As the Strait of Hormuz, a key oil shipping lane, has closed due to the Iran war and oil prices are soaring worldwide, the U.S. government has temporarily eased sanctions on Iranian oil and decided to supply that volume to key Asian allies, including Korea and Japan. It is a multipurpose move aimed at stabilizing prices in the short term while preemptively cutting off Iran's funding consolidation linked to China.
On the 22nd, according to major outlets including Reuters, NBC and Bloomberg, U.S. Treasury Secretary Scott Bessent said in an interview that the United States would "temporarily suspend sanctions on 140 million barrels of Iranian oil stuck at sea."
The United States has crafted a strategy to absorb the price shock by increasing the physical supply of oil to the spot market in the short term, as it did when it eased sanctions on Russian oil in the past. He said, "This oil was originally going to be sold to China at a bargain price," and noted, "By increasing market supply, the strategy is to prevent an extreme scenario in which oil prices soar to $150 per Barrel and to block the revenue Iran could collect from China." Minister Bessent said the sanctioned Iranian oil would be sold to Asian partner countries such as Korea, Japan and Indonesia.
The United States maintains a firm stance that it has ample resources needed for the war with Iran. Minister Bessent, regarding the additional $200 billion security budget recently requested urgently from Congress, dismissed concerns about tax hikes raised by some, saying, "It is merely a preemptive step to further streamline future logistics support; the war funds are already sufficient." He also expressed strong support for President Donald Trump's hard-line warning to Iran that "if the Strait of Hormuz is not opened within 48 hours, Iran's power plants will be destroyed." On the remarks, Minister Bessent said, "At times, paradoxically, tensions must be heightened to de-escalate," adding, "All physical options to neutralize Iran's core military asset are on the table."
Currently, the Strait of Hormuz, a core corridor for global crude oil and liquefied natural gas, is effectively completely sealed after Iran's armed provocations. Not only in the United States but around the world, prices of energy such as oil and natural gas are fluctuating, and inflationary pressures are rising. Minister Bessent said, "There may be short-term pain with sharply rising oil prices for about 50 days," but argued, "The fundamental security benefit of making sure the Iranian regime cannot possess nuclear weapons for the next 50 years is far greater." The logic is to pursue long-term national security and prosperity by strongly tightening the Iranian regime's funding lifeline while maintaining overwhelming deterrence.
Some criticized the current administration's act as a serious contradiction, saying it is allowing an enemy at full-scale war to openly sell oil to allies and to pocket huge economic benefits. Democratic Sen. Chris Murphy said in an NBC interview that "the U.S. administration has completely lost touch with reality," and criticized that it is making "fatal misjudgments, as in the wars in Vietnam or Afghanistan."
David Tenenbaum, a director at Blackstone Compliance Services, told the BBC that "essentially allowing oil sales is tantamount to helping Iran finance the war," questioning the policy's effectiveness. The Foundation for Defense of Democracies, a U.S. think tank, strongly warned that "there is a very high risk that Iran will reap billions of dollars in revenue by exploiting the sanction reprieve," adding that deregulation without safeguards could lead to a strengthening of pro-Iranian armed groups in the Middle East.