The Trump administration has announced it will lift sanctions on Iranian oil in a bid to alleviate high prices.
Treasury Secretary Scott Bessent announced a "narrowly tailored, short-term authorisation" for the sale of oil from the country the US is at war with.
The sanctions will be lifted for 140 million barrels of oil currently at sea.
READ MORE: Trump considering 'winding down' his war in Iran
"In essence, we will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury," Bessent said.
"This temporary, short-term authorisation is strictly limited to oil that is already in transit and does not allow new purchases or production.
"Further, Iran will have difficulty accessing any revenue generated and the United States will continue to maintain maximum pressure on Iran and its ability to access the international financial system."
The arrangement means that while other tankers are unable to move through the Strait of Hormuz for fear of being attacked by Iran, Iranian oil will still be able to be sold.
"At present, sanctioned Iranian oil is being hoarded by China on the cheap," Bessent said.
"By temporarily unlocking this existing supply for the world, the United States will quickly bring approximately 140 million barrels of oil to global markets."
Most of Iran's oil is sold to China.
READ MORE: Son of ousted king positions himself to take over in Iran
Meanwhile, other countries who export through the Persian Gulf are desperately looking for ways to store the oil they cannot put on ships.
About 20 per cent of oil sold in the world is exported through the Strait of Hormuz.
Last week the US also authorised the purchase of Russian oil that had previously been sanctioned.
Today's move comes as crude oil prices surged to a new high, and Wall Street plummeted.
Speaking to reporters today, US President Donald Trump was unfazed by the cost of oil.
"I expected worse," he said.
"I really thought that oil prices would go much higher when I did this."
READ MORE: How the war in Iran is impacting Australia's oil supply
In a Truth Social post earlier today, the president insinuated the US would be "winding down" the war.
His statement inferred the responsibility of ensuring the Strait of Hormuz would be reopened would be on other nations.
"The Hormuz Strait will have to be guarded and policed, as necessary, by other Nations who use it — The United States does not," he wrote.
"If asked, we will help these Countries in their Hormuz efforts, but it shouldn't be necessary once Iran's threat is eradicated.
""Importantly, it will be an easy Military Operation for them."
READ MORE: Donald Trump lashes out at NATO 'cowards' for not joining war
But his claims come as Iran's Supreme Leader Ayatollah Mojtaba Khamenei declared victory in his own statement.
"The enemy has been defeated," Khamenei said.
"(Iranians have) dealt him a dizzying blow so that he now starts uttering contradictory words and nonsense."
READ MORE: Trump considering ground invasion of critical Iranian island: reports
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