The United States has temporarily eased sanctions on Iranian oil at sea to curb the rally in crude oil prices with IRGC's Strait of Hormuz Blockade in place.
Israel and America's war with Iran entered into its 22nd day on Saturday, and with it strain on the narrow Hormuz channel, reponsible for transit of 20% of global oil, continued.
The conditional authorisation by US Treasury permits the delivery and sale of Iranian crude oil and other petroleum products loaded onto ships before March 20. In a statement on Friday, the Treasury outlined that the allowance is valid till April 19.
On Thursday, US Treasury Secretary Scott Bessent had announced that a lift in sanctions, which follows suit from easing of curbs on Russian oil at sea, was under consideration.
Iran's strategic blockade of the Strait of Hormuz has caused the biggest ever oil disruption in history, causing a crunch in supply and a sharp rise in crude oil prices across the globe.
"The war in the Middle East is creating the largest supply disruption in the history of the global oil market," International Energy Agency underlined in its monthly report last week.
The report further highlighted that with Middle East on the boil, global oil supply will decrease by 8 million barrels per day in march.
Moreover, the IEA has slashed its estimates for global consumption growth this year by roughly 25% to 6,40,000 barrels per day from 8,50,000 barrels per day; the lowest since it introduced forecasts for this year last April.
In a statement on Friday, Bessent described the move by the Office of Foreign Assets Control, as a narrowly tailored, short-term authorisation that follows President Donald Trump's intention to "maximise the flow of energy to the world" and ensure market stability.
"At present, sanctioned Iranian oil is being hoarded by China on the cheap," Bessent remarked.
"By temporarily unlocking this existing supply for the world, the United States will quickly bring approximately 140 million barrels of oil to global markets, expanding the amount of worldwide energy and helping to relieve the temporary pressures on supply caused by Iran," he added.
On the other hand, Tehran, claimed that it had no surplus crude oil to offer to international markets.
"Currently, Iran basically has no surplus crude oil left on the water or for supply in other international markets, and the US treasury secretary's statement is solely aimed at giving hope to buyers," Iranian oil ministry spokesman Saman Ghoddoosi wrote on X.
Presently, the Treasury's authorisation does not apply to deliveries of oil to Cuba, North Korea or Russian-occupied areas of Ukraine.
Oil markets remained volatile on Friday, with global benchmark Brent Crude closing 3.26% higher at $112.19 per barrel.
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