Fourteen billion dollars. That is what 140 million barrels of Iranian crude are worth at current market prices — and the United States just told the world it could buy them, three weeks into a bombing campaign against the country that pumped them out of the ground.

Treasury Secretary Scott Bessent announced the sanctions waiver on Friday, framing it with the breezy confidence of a man who has never been asked a follow-up question. “In essence, we will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury,” he wrote on X. Iran, he assured, “will have difficulty accessing any revenue generated.”

David Tannenbaum, director of Blackstone Compliance Services and a specialist in maritime sanctions, offered a more concise assessment. The idea, he told the BBC, was “bananas.”

The Price of Breaking a Market

The sanctions waiver did not arrive in a vacuum. It arrived in a market where Brent crude sits at $112 a barrel — up about 50% since the U.S. and Israel launched strikes on Iran on February 28, according to CNBC. U.S. retail gas prices have climbed 93 cents per gallon since the start of the year, per NBC News. United Airlines CEO Scott Kirby told employees the airline is planning for $175-a-barrel oil that doesn’t fall back to $100 until the end of 2027, a scenario so dire the company is already cutting flights.

The source of the crisis is no mystery. Iran effectively closed the Strait of Hormuz, through which roughly 20% of global oil and 20% of LNG shipments normally pass. Shipping in the channel has halted. Oil production across Kuwait, Iraq, Saudi Arabia, and the UAE collectively dropped by at least 10 million barrels per day as of 12 March, according to IEA data cited by Wikipedia — the largest supply disruption in the history of the global oil market.

The administration’s response has been to throw every lever it can find. Release hundreds of millions of barrels from strategic reserves. Waive the Jones Act. Ease sanctions on Russian oil. And now, ease sanctions on Iranian oil — the oil belonging to the government whose military infrastructure the U.S. is actively destroying.

Running Out of Levers

The 140 million barrels Bessent touted sound impressive until you do the arithmetic. Global oil consumption runs about 100 million barrels per day, according to the U.S. Energy Information Administration. The stranded Iranian crude amounts to roughly a day and a half of global demand.

“If they pursue this strategy and allow buyers to buy off this oil on the water, it’ll go quickly,” Gregory Brew, a senior analyst at Eurasia Group, told CNN. “Then we’ll be faced with the interesting proposal of dropping sanctions on Iranian oil generally.”

Brent Erickson, a managing principal at Obsidian Risk Advisors, put it more starkly to CNBC: “If we’ve reached the point of loosening sanctions on the country we are at war with, we’re really running out of options.”

The waiver is the administration’s third temporary sanctions rollback in just over two weeks. Each one has been pitched as a short-term pressure valve. None has slowed the price surge.

Follow the Money

So who benefits? The administration’s stated logic is that the barrels, previously destined for China at steep discounts, can now reach allies like India, Japan, and Malaysia at something closer to market price. “Iran was going to sell those barrels anyway,” a person familiar with internal discussions told CNN. “Instead of going to China, we make it sellable to Thailand or Vietnam.”

There is a certain accounting-textbook neatness to this argument. It falls apart in practice. At $112 a barrel, 140 million barrels generate roughly $14 billion in revenue, NBC News calculated. Bessent says Iran cannot access the funds. Danny Citrinowicz, a senior researcher at Tel Aviv University’s Institute for National Security Studies, was unconvinced. “The U.S. is funding a war against itself,” he told NBC News.

Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, acknowledged the bind. “The US government is definitely in an every-barrel-counts situation because of the scale of the supply shock,” she told the BBC. But she added that “it could be hard to prevent in practice.”

Meanwhile, the sanctions relief has a secondary beneficiary Washington would prefer not to discuss. As Moritz Brake of the Center for Advanced Security pointed out to NBC News, rising oil prices and lifted sanctions are simultaneously fuelling Russia’s war machine in Ukraine — even as Iran’s inability to supply drones has temporarily reduced Russian aerial attacks on Ukrainian cities. The war in Iran, it turns out, is subsidizing the war in Ukraine through the same energy markets it broke.

No Bright Ideas Left

President Trump has dismissed concerns about oil prices, calling the war worth any “short-term pain.” Asked about reopening the Strait of Hormuz, he told reporters that “at a certain point, it’ll open itself.”

Geography, as Citrinowicz noted, suggests otherwise. “Everybody knows that as long as Iran is controlling the straits, nothing will change in terms of the ability to take out the oil,” he said. “You cannot beat geography.”

The administration has ruled out export restrictions and further strategic reserve releases in the near term, CNN reported. Environmental waivers on summer gasoline blends are under consideration — a step every administration has taken since 2022 with minimal effect. Inside the government, officials charged with managing the crisis are, per CNN’s sources, “kind of resigned to watching.”

Landon Derentz, a former national security and energy official who served under three presidents, summarized the situation with admirable economy: “The nuance here is there isn’t nuance. Nobody else has a bright idea.”

What Washington has instead is a war that broke an energy market, a sanctions regime it is dismantling to cope with the consequences, and a 30-day waiver that covers one and a half days of global demand. The math does not require an editorial opinion. It speaks for itself.

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