The U.S. has resumed strikes on Iran following its decision to revoke a temporary waiver that had allowed Tehran to sell oil for 30 days. This waiver, issued on Friday, March 20, was intended to help ease global oil prices, which had surged by about 50% since the U.S. and Israel launched attacks on February 28. The waiver would have released approximately 140 million barrels of Iranian oil, valued at over $14 billion, into the market. However, the revocation indicates a shift back to a more confrontational approach.
Treasury Secretary Scott Bessent had previously stated the waiver was a temporary and "narrowly tailored" measure to address rising energy costs ahead of the November midterm elections. The administration had also temporarily lifted the Jones Act and eased sanctions on Russian oil in efforts to control prices, which had seen crude oil soar over 70% and retail gas prices rise by 93 cents per gallon. Despite these efforts, analysts like Brett Erickson of Obsidian Risk Advisors cautioned that such measures would have limited impact unless the Strait of Hormuz, a key conduit for 20% of the world's oil, was reopened. The Strait has been effectively closed since the conflict began.
Experts expressed concerns that the easing of sanctions highlighted a lack of strategic planning and the rapid depletion of Washington's economic toolkit to manage oil prices. Moritz Brake, a senior fellow, suggested an underestimation of Iran's resilience and the economic repercussions. Danny Citrinowicz, from the Institute for National Security Studies, remarked, "The U.S. is funding a war against itself," emphasizing that sanctions relief wouldn't alter the economic reality as long as Iran controls the Strait of Hormuz. International Brent oil traded around $111, up 8.3% for the week and 84% for the year, indicating the limited effect of the previous waiver on market prices despite the temporary measure potentially benefiting Iran economically.
