US considers lifting Iran oil sanctions to curb soaring energy prices as Federal Reserve warns of inflation

Energy Secretary Chris Wright says lifting Iran oil sanctions could help Asian ports in days, as Fed Governor Waller flags rising inflation risks from the war.

By: AXL Media

Published: Mar 20, 2026, 10:43 AM EDT

Source: Information for this report was sourced from The Times of Israel

A Rapid Response to Global Supply Contractions

The United States government is weighing a strategic shift in its sanctions policy to address the critical shortage of crude oil currently affecting international markets. Energy Secretary Chris Wright confirmed that removing restrictions on Iranian oil currently stranded on tankers at sea could provide an almost immediate reprieve for Asian refineries. According to Wright, once the legal barriers are lifted, these supplies could arrive at regional ports within three to four days. This move is viewed as a necessary intervention to counteract the 24 hour standstill in the Strait of Hormuz, which has effectively severed the primary artery for global energy distribution and sent local prices to record highs.

The Economic Mechanics of Sanctions Relief

Treasury Secretary Scott Bessent has indicated that the administration’s primary objective is to curb the aggressive price spikes resulting from the maritime blockade. The plan involves releasing millions of barrels of oil that have been held in floating storage due to existing trade prohibitions. According to Secretary Wright, once this oil reaches its destination, it would be refined and fully absorbed into the global market within a 30 to 45 day window. By flooding the market with these "stranded" volumes, Washington hopes to provide a bridge for energy consumers while the broader conflict remains unresolved and the strategic waterway remains impassable for traditional commercial transit.

Shifting Monetary Policy Amid Geopolitical Strife

The protracted nature of the conflict between the United States, Israel, and Iran has forced a significant recalibration of American monetary policy. Federal Reserve Governor Christopher Waller, who had previously advocated for interest rate cuts to bolster the labor market, has formally reversed his position. Waller expressed deep concern that the ongoing closure of the Strait of Hormuz will keep oil prices elevated for a much longer duration than initially anticipated. This shift in perspective led the Fed to hold interest rates steady earlier this week, as the risk of energy-driven inflation has superseded previous concerns regarding employment stability.