Be Forest is buying time for Trump; short-term easing of oil prices possible

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┈➤Extension of sanctions waivers
U.S. Secretary of the Treasury, Janet Yellen, just announced that the sanctions waiver for Iran's offshore oil has been extended by 30 days. On April 19, the waiver for Russia was already extended by 30 days.
First, an explanation:
First, it is not a lifting of financial sanctions, but a waiver of sanctions on offshore oil, meaning oil in transit.
Second, the so-called financial sanctions do not prevent Iran and Russia from selling crude oil, but are stuck at the buyer's end. Sanctions waivers allow importing countries to buy this in-transit or already-transported oil that has reached the port of import.
Third, it is uncertain whether Iran and Russia can receive settlement payments, or if their overseas assets are directly frozen like other Iranian assets.
Along with extending the waivers, Yellen also emphasized that "the claim that Iran can gain $14 billion in revenue due to sanctions relief is pure nonsense." This can be seen as helping Trump respond to some Democratic criticisms.
┈➤Psychological reassurance and expectation management
On the other hand, Yellen said that the sanctions relief "can release over 250 million barrels of waterborne oil."
In reality, it may not be that much, because there was a previous 30-day extension, and some of the oil may have already been traded.
But regardless, the figure of 250 million barrels might ease the anxiety of demand-side players. If oil-importing countries expect oil prices to fall, their buying activity will slow down, further helping to stabilize prices.
┈➤How big is the global oil gap?
I checked Gemini and GPT; before the conflict, the Middle East produced about 31 million barrels of crude oil per day, with exports around 21.5 to 22 million barrels.
Oman’s production is 1 to 1.1 million barrels, as Oman does not rely on the Strait of Hormuz for exports.
With the Strait of Hormuz blocked, some pipelines are being reused.
First, Saudi Arabia’s east-west pipeline, with a capacity of up to 7 million barrels per day, is currently being pumped and pressurized, aiming for 8.5 million barrels.
Second, the UAE’s ADCOP pipeline, with a capacity of about 1.8 million barrels per day, is diverting flow.
Third, Iran-Turkey pipeline, with a capacity of about 250k barrels per day, is being activated, along with new Iraq-Jordan projects.
This allows about 9.05 million barrels of crude oil to be exported.
Additionally, some oil is transported by land to other regions, such as Pakistan, disguised as local oil for export.
Besides the Middle East, after Maduro was taken away, Venezuela increased oil production, with about 900k barrels per day in 2025, and an average of about 1.2 million barrels per day since January.
From January to April, Venezuela’s oil extraction was under reconstruction, so during the period when the Strait of Hormuz was blocked, Venezuela’s output might have been even higher.
Overall, the global oil gap is roughly 10 million barrels per day.
┈➤Impact of oil prices in Asia and the Americas
╰✦Asia
Only the UAE’s ADCOP pipeline is relatively convenient for shipments to Asia, but the volume is limited. Oil prices in Asia remain somewhat pessimistic. Most of the in-transit oil under these sanctions waivers is from Russia and Iran heading to Asia, so Asian oil prices may have slightly eased in recent days.
Before the Strait was blocked early 2026, exports to Asia via the Strait of Hormuz were about 17 to 18 million barrels per day. Considering that part of the 250 million barrels of oil is headed to other continents, and some were already traded during the previous waiver period, this 250 million barrels could support about two weeks of demand.
But after these days, Asian oil prices may still not be very optimistic.
╰✦Europe
Two of the three Middle Eastern oil pipelines mainly supply Europe. Saudi Arabia’s east-west pipeline can only export northward to the Mediterranean.
The Suez Canal tolls are not cheap, because the southern Red Sea and Gulf of Aden are controlled by Iran’s proxy, the Houthi armed group.
Iraq and Turkey mainly export to Europe, so Europe’s oil supply might see some ongoing improvement.
╰✦The Americas
These 250 million barrels are mainly exported to Asia. Asian buyers’ short-term rush to purchase American oil will temporarily cool down, slightly positively impacting U.S. oil prices.
Pipelines to Europe help ease Europe’s demand for American oil. So, the short-term impact on the Americas is relatively small, with some ongoing pressure alleviated by pipeline exports.
Before the Strait opened, U.S. oil prices mainly depended on Venezuela’s increased output. According to information found in a media article, U.S. Energy Secretary said that since January 3, Venezuela has sold about 150 million barrels of oil. He said the country produces over 1.2 million barrels daily and has about 50 million barrels in storage, "but they cannot enter the market."
It seems that Trump’s approach to handling relations with Venezuela was correct; Venezuela also has the potential to increase production, which could help temporarily ease U.S. oil prices.
However, currently, U.S. oil companies are not very eager to invest more in Venezuela. If they do, Venezuela could significantly boost its oil output, which might be beneficial for U.S. inflation control. Better inflation control means earlier monetary easing, which markets, especially crypto markets, are hoping for.
┈➤Final thoughts
Actually, if the Strait remains closed for a long time, I calculated that compared to before February, the global oil supply-demand gap is about 10 million barrels more per day. Before February, daily oil production was over 100 million barrels, so supply decreased by roughly 10%.
Even if the demand curve for oil is steep, prices won’t rise infinitely. Under new supply-demand dynamics, oil prices might find a new equilibrium range.
The problem is that panic has set in, leading to rush buying and price speculation. From Yellen’s perspective, one is to respond to Democratic doubts; two is to buy Trump and Iran some negotiating time; three is to ease oil price anxiety.
Recently, the relief from the 250 million barrels in transit can only be partial. True price declines depend on the U.S. and Iran reaching an agreement and fully reopening the Strait of Hormuz.
But during the time Yellen is trying to buy for Trump, will both sides reach an agreement?! ()