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Why Did the US Just Lift Sanctions on Iranian Oil?
The Liberian-flagged oil tanker Ice Energy transfers crude oil from the Iranian-flagged oil tanker Lana (former Pegas), off the shore of Karystos, on the Island of Evia, Greece, May 26, 2022. REUTERS/Costas Baltas
According to estimates, on the eve of the current war, some 140 million barrels of Iranian oil were floating at sea. This oil had already been produced and loaded onto tankers, and the vast bulk of it had already passed through the Strait of Hormuz before the war broke out. The Chinese had bought most of this oil, but chose to leave it at sea because their strategic reserves were full of the medium-sour oil that Iran produces, and US sanctions on the Iranian banking system made it difficult to resell the oil to other customers. Iranian oil tankers were thus left waiting for months near China’s shore.
On March 20, 2026, the US announced a temporary 30-day lifting of sanctions on the sale and delivery of Iranian oil. The permit applies only to oil that was already loaded onto tankers by that day, and the oil in question must be unloaded by April 19.
The US is attempting to quickly calm the market by allowing countries to buy these millions of barrels of oil. As a significant portion of this oil had already been sold to China, Washington is effectively allowing Beijing, if it so wishes, to release the cargo to be sold in Japan, India, South Korea, and other Asian countries interested in Iranian medium-sour oil.
Even if the Chinese opt to keep all the oil for themselves, the result will still relieve the market, because similar types of oil — primarily Russian medium-sour — can then flow to other customers in Asia. According to the US Secretary of Energy, these tankers could begin arriving at Asian ports within three to four days.
The type of oil is very important here, because it determines who can benefit from the American sanctions relief on Iran’s oil. Oil grades are defined by two main indicators: density (“light” vs. “heavy”) and sulfur content (“sweet” vs. “sour”). The oil’s grade affects the costs of transportation and refining, as well as the types of distillates that can be produced from it. Light and sweet oil can produce more gasoline, diesel fuel, and jet fuel. Heavy oil is more suitable for bunker oil for ships or bitumen for asphalt. Refineries are usually built to operate most efficiently with a specific grade of crude oil. They can process other oil grades if necessary, but not at the same level of profitability or efficiency.
Iranian oil is mostly medium-sour. Not every refinery can produce the same distillates from it with the same efficiency, and not all countries in Asia have the necessary refining capacity in the first place. Countries like India, Japan, South Korea, and Singapore are well-suited for this oil and have more advanced refining capabilities. In contrast, countries that depend more on imported distillates and less on independent refining, such as the Philippines, Sri Lanka, Vietnam, and Australia, are more vulnerable to prolonged disruptions and would benefit from Iranian oil only indirectly.
This is where China comes into the picture. It has a huge domestic refining capacity and significant reserves, and thus has great influence on gasoline and diesel prices throughout Asia. Even without the American relief on Iranian oil, Beijing could have released some of its strategic reserves or distillates into the market and eased prices for its neighbors — but it has no interest in doing so. As early as the first week of the war, China announced restrictions on distillate exports, leading to a dramatic increase in gasoline and diesel prices in Thailand, the Philippines, and Vietnam. China may be using this as a political lever to increase pressure on the US to end the fighting, or it may at the very least be planning to turn energy into a regional bargaining tool and sell distillates to its neighbors in exchange for political benefits.
The main criticism of the American move is that lifting oil sanctions strengthens the Iranian regime and enriches its coffers during the war. US Treasury Secretary Scott Bessent claims that Washington will monitor sales and make it difficult for Iran to access these revenues, emphasizing the continuation of the “maximum pressure” policy on Iran’s ability to use the international financial system. However, he has not explained how the US will prevent Iran from circumventing the restrictions, as it has done so far. In its trading with China, Iran has often used barter transactions, cash, or payments in yuan rather than dollars to circumvent sanctions. It has also used intermediary companies and countries (mainly Oman and Malaysia) to “launder” the source of its oil, and has relied on offshore bank accounts in Qatar, the United Arab Emirates, Mauritius, and elsewhere with the full knowledge of the countries involved.
It can be argued, however, that Iran’s ability to circumvent US restrictions has been reduced since the beginning of the war, now that Iran itself has bombed some of the countries where it holds offshore accounts. The United Arab Emirates, for example, announced on March 5 that it is considering freezing Iranian accounts in the country. This allows the US to say with greater confidence that it has more control over revenue coming from Iranian oil sales, whether or not this is in fact the case.
In the short term, this seems to be a relatively calculated move by the US. According to the administration’s own statements, its goal is not to provide relief to Iran’s economy but to quickly release oil that has already been produced and is now at sea. The move is designed to relieve pressure on the market for about two weeks. From Washington’s perspective, this is a limited price it is willing to pay to buy time, stabilize the energy market, and preserve greater freedom of action in the war, at least until it can greatly reduce Iran’s ability to close the Strait of Hormuz.
Dr. Elai Rettig is an assistant professor in the Department of Political Studies and a senior research fellow at the Begin-Sadat Center for Strategic Studies at Bar-Ilan University. He specializes in energy geopolitics and national security. A version of this article was originally published by The BESA Center.
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Ukraine Has ‘Irrefutable’ Evidence of Russia Providing Intelligence to Iran, Zelenskiy Says
Ukraine’s President Volodymyr Zelenskiy attends a press conference with European Commission President Ursula von der Leyen (not pictured) and European Council President Antonio Costa (not pictured) on the fourth anniversary of Russia’s full-scale invasion of Ukraine, in Kyiv, Ukraine, Feb. 24, 2026. Photo: REUTERS/Valentyn Ogirenko
Ukraine‘s military intelligence has “irrefutable” evidence that Russia continues to provide intelligence to Iran, Ukrainian President Volodymyr Zelenskiy said on Monday after meeting the head of military intelligence.
“Russia is using its own signals intelligence and electronic intelligence capabilities, as well as part of the data obtained through cooperation with partners in the Middle East,” he said on X.
Kremlin last week dismissed a Wall Street Journal report that Russia was sharing satellite imagery and improved drone technology with Iran as “fake news.”
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Belgium Deploys Soldiers to Reinforce Security at Jewish Sites
Belgian army personnel patrol a street as part of a deployment of soldiers outside Jewish institutions in Antwerp and Brussels following attacks at Jewish sites in Belgium and other European countries, in Antwerp, Belgium, March 23, 2026. Photo: REUTERS/Yves Herman
Soldiers were deployed on the streets of leading Belgian cities on Monday to bolster security for the Jewish community, after what officials said were antisemitic attacks in Belgium and the Netherlands.
The move follows an explosion this month at a synagogue in Liege that authorities called an antisemitic act.
“From today we’re putting soldiers back on the streets in Brussels and Antwerp because safety is a basic right,” Belgian Defense Minister Theo Francken said in a post on X on Monday.
The deployment, in collaboration with federal police, will provide security at Jewish sites including synagogues and schools, Belgian authorities said in a press release last week.
Antwerp “is again a little safer … the Jewish community too. We say NO to antisemitism!” Francken said on Monday.
The upgrade in security also follows an arson attack on a synagogue in Rotterdam and an explosion at a Jewish school in Amsterdam in neighbouring The Netherlands.
Dutch police have arrested five suspects, aged 17 to 19, over the synagogue attack in Rotterdam.
The US embassy in Oslo was also targeted in a bombing earlier this month branded by Norwegian investigators as an act of terrorism. None of the attacks caused injuries.
A Belgian defense ministry spokesperson said on Monday that soldiers would be deployed in three different phases: First in Brussels and Antwerp, later in Liege.
Rights advocates have raised concerns about possible attacks against Jewish communities around the world following the launch of the US and Israeli war with Iran. Four ambulances belonging to a Jewish community organisation in north London were set ablaze on Monday.
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Trump Puts Off Threat to Bomb Iran Power Grid; Tehran Denies Talks Taking Place
Streaks of light illuminate the sky during an interception attempt amid the US-Israeli conflict with Iran, as seen from Tel Aviv, Israel, March 23, 2026. Photo: REUTERS/Amir Cohen
US President Donald Trump said on Monday he had given orders to postpone for five days the attacks he had threatened against Iranian power plants, and said the US was in talks with Tehran about ending the US-Israeli war on Iran.
However, Parliamentary Speaker Mohammad Baqer Qalibaf, mooted to be the leader representing Iran in contacts with the US, posted on social media that no talks had been held with the US.
As reciprocal airstrikes continued, financial markets had broadly welcomed the reports of efforts to negotiate an end to the war. Even after Qalibaf’s comments, the Brent crude oil benchmark was down around 8% to about $103 a barrel.
Iran has effectively closed the key Strait of Hormuz, through which about a fifth of global oil and liquefied natural gas flows.
Trump wrote early in the US morning on his Truth Social platform that the US and Iran had had “very good and productive” conversations over the past two days about a “complete and total resolution of hostilities in the Middle East.”
OIL DROPS, STOCKS RECOVER ON PROSPECT OF PEACE TALKS
He later told reporters that his special envoy Steve Witkoff and son-in-law Jared Kushner, who had been negotiating with Iran before the war, had had discussions with a top Iranian official into the evening on Sunday, and would continue on Monday.
“We have had very, very strong talks. We’ll see where they lead. We have major points of agreement, I would say, almost all points of agreement.”
“All I’m saying is, we are in the throes of a real possibility of making a deal,” he told reporters before departing Florida for Memphis.
He declined to say who the US was speaking to in Iran but said it was not Supreme Leader Mojtaba Khamenei, who was wounded in the Israeli attack at the start of the war that killed his father and predecessor, Ayatollah Ali Khamenei, according to Washington.
“We’re dealing with the man who I believe is the most respected and the leader,” Trump said.
An unnamed Israeli official and a source familiar with the matter told Reuters that Qalibaf, increasingly influential, was representing Iran and that talks on ending the war could be held in Islamabad as soon as this week.
A reporter for the US news outlet Axios also said mediating countries, which he named as Egypt, Turkey, and Pakistan, were trying to convene an Iranian-US meeting in Islamabad this week including Witkoff, Kushner, and Vice President JD Vance.
Trump said he had spoken with Israel, which he said would be “very happy with what we have.”
Although Mojtaba Khamenei holds the ultimate authority in Iran, and the foreign ministry led past negotiations with the US, Iran experts say the realities of wartime decision-making have effectively shifted control to the Islamic Revolutionary Guard Corps (IRGC), which now exerts decisive influence over key areas including foreign policy.
A source briefed on Israel’s war plans said Washington had kept it informed of its contacts with Tehran, and that Israel was likely to follow Washington in suspending any targeting of Iranian power plants and energy infrastructure.
Israeli Prime Minister Benjamin Netanyahu’s office did not immediately respond to a request for comment on talks or on Washington’s decision to suspend strikes on some targets.
Global markets rose sharply, with US stocks up more than 2%.
On Saturday, Trump had warned that Iranian power plants would be destroyed if Tehran failed to “fully open” the Strait of Hormuz to all shipping within 48 hours. Trump set a deadline of around 7:44 pm EDT (2344 GMT) on Monday.
The IRGC threatened retaliation, saying it would attack Israel’s power plants and those supplying US bases if Trump followed through with his threat.
MARKETS AND ECONOMIES IN TURMOIL
Iranian media reported that they had on Monday attacked targets in Israel and US bases in the region.
More than 2,000 people have been killed in the war the US and Israel launched on Feb. 28, which has devastated Iran’s leadership and military capabilities while driving up fuel costs and accelerating global inflation fears.
However, the threat of strikes on Gulf electricity grids raised fears of mass disruption to desalination for drinking water, and further rattled oil markets.
While attacks on electricity could hurt Iran, they could be catastrophic for its Gulf neighbors, which consume around five times as much power per capita.
Electricity makes their gleaming desert cities habitable, in part by powering the desalination plants that produce 100% of the water consumed in Bahrain and Qatar. Such plants use seawater to meet more than 80% of drinking water needs in the United Arab Emirates, and 50% of the water supply in Saudi Arabia.
Fatih Birol, executive director of the International Energy Agency, said the resulting energy crisis was worse than the two oil shocks of the 1970s and the gas shortage connected to Russia’s 2022 invasion of Ukraine put together.
Iran‘s Defense Council escalated its threatened retaliation on Monday, prior to Trump‘s delay, saying Tehran would cut all Gulf routes by laying sea mines if Trump followed through, state media reported.
The Israeli military said early on Monday it had begun its latest broad wave of strikes on infrastructure in Tehran.
Iranian news agencies said six people had been killed and 43 injured in strikes in the western city of Khorramabad.
The Iranian Red Crescent posted a video of a residential building in affluent northern Tehran with most of its facade destroyed and emergency staff rescuing someone on a stretcher from the upper floors.
Across the Gulf, the Saudi defense ministry said two ballistic missiles had been launched towards Riyadh. One was intercepted while the other fell in an uninhabited area.