Why are journos and pundits and experts gobsmacked that we have withdrawn sanctions against Iran oil? In reality, countries at war have often traded with each other down through history.
The administration argues that this is a form of economic warfare. By flooding the global market with Iranian oil already in transit, the U.S. aims to crash crude prices, which recently hit $118 per barrel. High oil prices generally benefit the Iranian government, so the U.S. intends to use Iran’s own resource to lower the revenue Tehran receives per barrel. Officials emphasize that the revenue from these sales will be difficult for Iran to access due to remaining financial sanctions.
Critics and pundits expressed shock because the move appears to provide a financial lifeline to an adversary during active hostilities. David Tannenbaum of Blackstone Compliance Services described the policy as “bananas,” noting that it allows Iran to offload a “ghost armada” that would otherwise be stuck at sea. The concern is that any revenue that reaches Tehran, however restricted, could fund their war effort.
That countries continue to trade while at war is a recurring theme in history. Experts often call this “trading with the enemy,” and it usually happens when the benefit of the resource outweighs the desire to totally isolate the opponent.
World War I: Britain continued to import chemical dyes from Germany throughout much of the war because German industry held a monopoly on those specific resources.
The Crimean War: Great Britain permitted wheat trade with Russia in the mid-19th century despite being on opposite sides of the battlefield.
The Russia-Ukraine War: Even after the 2022 invasion, Russian natural gas continued to flow through Ukrainian pipelines to supply Europe. Ukraine collected transit fees from Russia while the two nations were actively fighting.
India and Pakistan: Both nations maintained certain trade links during the First Kashmir War (1947–1949) and the 1965 war.
The current move is a tactical choice to prioritize global energy stability and domestic inflation over the total economic isolation of Iran. The administration is essentially betting that the downward pressure on oil prices hurts the Iranian war machine more than the sale of the stranded oil helps it.
