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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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Trump Says Gas Prices May Remain High Through November Midterm Election
U.S. President Donald Trump takes questions from reporters while Vice President JD Vance and Secretary of State Marco Rubio look on, as they attend a meeting with oil industry executives, at the White House in Washington, D.C., U.S., January 9, 2026. REUTERS/Kevin Lamarque
US President Donald Trump said on Sunday that the price of oil and gasoline may remain high through November’s midterm elections, a rare acknowledgement of the potential political fallout from his decision to attack Iran six weeks ago.
“It could be, or the same, or maybe a little bit higher, but it should be around the same,” Trump, who is in Miami for the weekend, told Fox News’ “Sunday Morning Futures With Maria Bartiromo” when asked whether the cost of oil and gas would be lower by the fall.
The average price for regular gas at US service stations has exceeded $4 per gallon for most of April, according to data from GasBuddy. Trump’s comments on Sunday came after weeks of asserting that the spike in prices is a short-term phenomenon, though his top advisers are cognizant of the war’s economic impacts, officials have said.
Earlier on Sunday, Trump announced on social media that the US Navy would blockade the Strait of Hormuz and intercept any ship that paid a crossing fee to Iran, after marathon talks between the US and Iran in Pakistan over the weekend did not yield a peace deal.
“No one who pays an illegal toll will have safe passage on the high seas,” he wrote on Truth Social.
Any US blockade is likely to add more uncertainty to the eventual resolution of the conflict, which is currently subject to a tenuous two-week ceasefire. The new tactic is in response to Iran’s own closure of the strait’s critical shipping lanes, which has caused global oil prices to skyrocket about 50%.
UNPOPULAR WAR HITS TRUMP’S APPROVAL
The war began on February 28, when the US launched a joint bombing campaign with Israel against Iran. The scope quickly expanded as Iran and its allies attacked nearby countries, while Israel targeted Hezbollah with massive strikes in Lebanon.
The war has buffeted global financial markets and caused thousands of civilian deaths, mostly in Iran and Lebanon.
Trump’s political standing at home has suffered, with polls showing the war is unpopular among most Americans, who are frustrated by rising gasoline prices.
The president’s approval rating has hit the lowest levels of his second term in office, raising concern among Republicans that his party is poised to lose control of Congress in the midterm elections. A Democratic majority in either chamber could launch investigations into the Trump administration while blocking much of his legislative agenda.
US Senator Mark Warner of Virginia, the ranking Democrat on the Senate Intelligence Committee, questioned the strategy behind Trump’s planned blockade.
“I don’t understand how blockading the strait is going to somehow push the Iranians into opening it,” he told CNN’s “State of the Union” on Sunday.
In a separate appearance on CBS’s “Face the Nation,” Warner said the blockade would not undermine Iranian control of the waterway.
“The Iranians have hundreds of speedboats where they can still mine the strait or put bombs against tankers in closing the strait,” he said. “How is that going to ever bring down gas prices?”
Although Trump has repeatedly said that the war would be over soon, Republican US Senator Ron Johnson of Wisconsin told ABC News’ “This Week” on Sunday that achieving US aims in Iran “could take a long time.”
“It’s going to be a long-term project,” said Johnson, who was not asked about Trump’s proposed blockade. “I never thought this would be easy.”
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Israel’s Ben-Gvir Visits Flashpoint Al-Aqsa Mosque Compound
Israeli politician Itamar Ben-Gvir walks inside the Knesset, in Jerusalem, Oct. 13, 2025. Photo: Chip Somodevilla/Pool via REUTERS
Israel’s far-right police minister Itamar Ben-Gvir visited the flashpoint Al-Aqsa Mosque compound in Jerusalem on Sunday, saying he was seeking greater access for Jewish worshipers and drawing condemnation from Jordan and the Palestinians.
The compound in Jerusalem’s walled Old City is one of the most sensitive sites in the Middle East. Known to Jews as Temple Mount, it is the most sacred site in Judaism and is Islam’s third-holiest site.
Under a delicate, decades-old arrangement with Muslim authorities, it is administered by a Jordanian religious foundation and Jews can visit but may not pray there.
Suggestions that Israel would alter the rules have sparked outrage among Muslims and ignited violence in the past.
“Today, I feel like the owner here,” National Security Minister Ben-Gvir said in a video filmed at the site and distributed by his office. “There is still more to do, more to improve. I keep pushing the Prime Minister (Benjamin Netanyahu) to do more and more — we must keep rising higher and higher.”
A statement from the Jordanian foreign ministry said it considered Ben-Gvir’s visit to be a violation of the status quo agreement at the site and “a desecration of its sanctity, a condemnable escalation and an unacceptable provocation.”
The office of Palestinian president, Mahmoud Abbas, said such actions could further destabilize the region.
Ben-Gvir’s spokesman said the minister was seeking greater access and prayer permits for Jewish visitors. He also said that Ben-Gvir had prayed at the site.
There was no immediate comment from Netanyahu’s office. Previous such visits and statements by Ben-Gvir have prompted Netanyahu announcements saying that there is no change in Israel’s policy of keeping the status quo.
Muslim, Christian and Jewish sites, including Al-Aqsa had been largely closed to the public during the Iran war. There was no immediate sign of unrest on Sunday after Ben-Gvir’s visit.
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Netanyahu Visits Troops Fighting Hezbollah in Southern Lebanon
Israeli Prime Minister Benjamin Netanyahu speaks during a press conference at the Prime Minister’s office in Jerusalem, Aug. 10, 2025. Photo: ABIR SULTAN/Pool via REUTERS
i24 News – Israeli Prime Minister Benjamin Netanyahu visited Israeli forces operating in southern Lebanon on Sunday as military operations against Hezbollah-linked targets continue.
Netanyahu toured forward positions alongside Defense Minister Yisrael Katz, Eyal Zamir, and Northern Command Commander Rafi Milo, meeting troops and receiving operational briefings from commanders on the ground.
Speaking to soldiers, Netanyahu praised their performance and said operations in the Lebanese security zone were ongoing.
“The war continues, including within the security zone in Lebanon,” he said, adding that Israeli forces were working to prevent infiltration attempts and neutralize threats such as anti-tank fire and missiles.
He described the northern campaign as part of a broader regional struggle involving Iran and its allies, saying Israel’s adversaries were now “fighting for their survival” following sustained Israeli military pressure.