Treasury Secretary Scott Bessent identified Iranian crude oil stranded on tankers as an untapped emergency reserve Thursday, revealing the administration is considering temporarily lifting sanctions on approximately 140 million barrels of Iranian crude in international waters. Bessent said tapping this reserve could help bring down oil prices that have remained above $100 per barrel since Iran’s closure of the Strait of Hormuz.
The concept of an untapped emergency reserve reflects the administration’s view that the Iranian crude on tankers represents a supply resource that has been effectively taken off the market by the combination of US sanctions and Iran’s Hormuz blockade. With between 10 and 14 million barrels of daily supply removed from global markets for close to two weeks, identifying and tapping untapped reserves has become a priority.
Bessent said the Iranian crude on tankers, originally destined for Chinese buyers, qualifies as an untapped emergency reserve because it is already at sea, requires no new production, and can be redirected to global buyers within days if sanctions are temporarily waived. He estimated the reserve would provide approximately two weeks of price support during the US campaign against the Hormuz blockade.
The Treasury has previously tapped comparable untapped reserves, 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 categorically ruled out any financial market intervention.
Independent experts raised questions about the emergency reserve designation. Compliance professionals and national security analysts pointed out that tapping the Iranian crude reserve — however compelling the emergency rationale — would generate oil revenues for the Tehran regime that could fund military activities and proxy support. Critics argued that a reserve whose tapping generates funds for an adversary should be approached with considerably more caution than a conventional emergency reserve whose proceeds benefit only the market.