Hormuz Day 20: Bombing Iran and Selling Its Oil: The Sanctions Waiver Paradox
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Sanctions Waiver: 140M Barrels
The US is bombing Iran and selling its oil. The Treasury Department waived sanctions on 140 million barrels of Iranian crude currently at sea, tankers loaded before February 28 or during the crisis from Iran’s floating storage. Thirty-day window through April 19. Only oil already in transit; no new Iranian purchases authorized.
Treasury Secretary Bessent: “We will be using the Iranian barrels against Tehran to keep the price down.” Circular logic: US bombs Iran, Strait closes, oil spikes, Treasury releases Iranian oil to suppress the spike its own campaign caused.
Brent closed at $112.19, its highest settlement since the war began. 140M barrels = ~1.5 days of global consumption. Against a structural deficit of 4-5M bbl/day, the waiver is a headline.
The Goldman Call
Goldman Sachs published its revised oil outlook on Thursday: triple-digit Brent crude “may stay for years.” The note argues that even a ceasefire cannot quickly restore Gulf production or clear Hormuz mines. Structural damage to Gulf export infrastructure, depleted inventories, and the precedent effect (demonstrated vulnerability of Hormuz to closure) will sustain a permanent risk premium.
ING’s commodities desk reinforced the message: “We are unlikely to have seen the highs yet.” Barclays revised its year-end Brent target to $115. JPMorgan went to $120. The $200 scenario that Al Jazeera reported yesterday is now a standard stress-test case at major banks.
Time horizons have shifted alongside price targets. Before March 19, analysts debated weeks or months of triple digits. Now the debate is years or decades. The Hormuz risk premium may never fully dissipate.
”Winding Down”
Trump posted on social media that the US is “getting very close to meeting our objectives” and considering “winding down” military operations. In the same 24-hour period, the Pentagon deployed 2,500 additional Marines to the region.
Asked directly on CNBC whether he would pursue a ceasefire with Iran, Trump said no. He is not interested in a ceasefire. Iran’s Foreign Minister Araghchi, appearing on CBS’s Face the Nation, mirrored the position: “We never asked for a ceasefire, and we have never asked even for negotiation.”
The diplomatic impasse is now total and stated. Both sides have publicly rejected ceasefire and negotiation. No off-ramp exists. The US is reportedly considering plans to blockade or occupy Kharg Island (90% of Iran’s exports). That would be the war’s most significant escalation since the opening strikes.
Iran’s Vetting System Takes Shape
Iran is formalizing its Hormuz vetting system while the US debates end states. Al Jazeera reports a “vetting and registration system” for transit, a bureaucratic apparatus to administer the selective blockade. Countries would apply for transit rights, submit vessel manifests, and receive authorization through a Tehran-controlled clearance process.
The system is in direct talks with India, Pakistan, Iraq, Malaysia, and China. Turkey already has de facto access. The approved transit list continues to grow, with vessel transits nearly doubling from the full-closure period, but remaining 95% below pre-crisis normal.
If Iran institutionalizes this system, the Strait ceases to function as an international waterway under UNCLOS and becomes an administered passage under Iranian sovereign control. Even after a ceasefire, the precedent and the infrastructure to reimpose control would persist.
The Marine Deployment
The 2,500 additional Marines are joining a force structure that has already projected more firepower into the Gulf region than at any point since the 2003 Iraq invasion. Two carrier strike groups, a Marine Expeditionary Unit, Air Force bomber wings operating from Diego Garcia and Gulf bases, and Special Operations forces have sustained the highest sustained sortie rate since Operation Enduring Freedom.
Cost: $1-1.4B/day, up from initial $891M/day estimates. Pentagon and New York Times analyses project total costs approaching $25-30 billion by the end of March.
US casualties: ~11 KIA, 200+ wounded, with 180+ returned to duty. Iran’s retaliatory missile and drone attacks continue across all six GCC nations, with targets including US bases, commercial airports, and oil infrastructure.
What to Watch
- Brent $119 retest. Thursday’s $112 close sets up another run at the crisis high. Nuclear escalation (Natanz/Dimona reports) will be the trigger.
- Sanctions waiver uptake. Will refiners actually buy 140M barrels of Iranian crude? Reputational and re-sanction risk may keep buyers away.
- Kharg Island. Blockade or occupation reports would mark the war’s biggest escalation since opening strikes.
- Iran vetting formalization. Published rules would crystallize the new Hormuz regime.
- Goldman repositioning. “Years of triple digits” call will drive institutional long-dated crude positioning.
- “Winding down” vs. 2,500 Marines. The contradiction generates political pressure. Congressional demands for war aims clarity are intensifying.
Market Data
| Metric | Day 19 (Mar 19) | Day 20 (Mar 20) | Change |
|---|---|---|---|
| Brent Crude | ~$119 high / ~$109 close | $112.19 close (war high) | Highest settlement of the war |
| WTI Crude | ~$108 | ~$107 | Sustained triple digits |
| VLCC Day Rate | $428K+/day | $425K+/day | Records sustained |
| Gulf Offline | ~7.5-8.0M bbl/day | ~8.0M bbl/day | Crossing 8M threshold |
| Sanctions Waiver | N/A | 140M bbl (30-day) | Headline, not solution |
| US Targets Struck | 12,000+ | 13,000+ | Approaching 15,000 |
| Coalition | 22 willing / 6 committed | Same | Zero operational |
| Goldman Forecast | N/A | Triple digits “for years” | Paradigm shift |
Sources
- Washington Post: US lifts sanctions on 140M barrels of Iranian oil at sea (Mar 20)
- CNBC: Trump rejects ceasefire, Brent $112.19 close (Mar 20)
- CBS News: Araghchi interview, “never asked for ceasefire”
- Goldman Sachs: Triple-digit oil outlook (via CNN, Mar 20)
- Fortune: Brent $112.19 Friday close
- Al Jazeera: Iran vetting system, $200/bbl analysis
- NYT/Pentagon: War cost estimates $1-1.4B/day
- Reuters: Marine deployment, Kharg Island planning reports
- ING Commodities: “Unlikely to have seen the highs yet”
- Barclays, JPMorgan: Revised Brent targets
- Bloomberg: Sanctions waiver market analysis
- Lloyd’s List: VLCC rates, tanker positioning