The global offshore oil market's buffer inventory is being consumed at the fastest rate in recent years, forcing the U.S. government to take action to suppress oil prices.
According to an article from Wall Street Insight, U.S. Treasury Secretary Janet Yellen announced on March 20 local time that the U.S. has approved a 30-day authorization allowing the delivery and sale of Iranian crude oil and petroleum products that have already been loaded onto ships. Yellen stated that this move would &#34;quickly provide approximately 140 million barrels of oil to the global market,&#34; but emphasized that the authorization is &#34;strictly limited to oil that is already in transit, and does not allow for new purchases or production activities.&#34;
The direct background for this exemption is the sharp decline in global offshore floating oil storage. According to Bloomberg, citing data from the data intelligence firm Vortexa, since the outbreak of conflict in the Middle East, offshore crude oil and condensate floating storage has been decreasing at a rate of 1.8 million barrels per day, currently down to about 78 million barrels—of which about one-third comes from Iran.
Analysis indicates that the rapid reduction of this buffer layer is the core logic behind Washington's decision to greenlight Iranian offshore oil.
This decision, along with the previously disclosed plan to release approximately 45 million barrels from the Strategic Petroleum Reserve (SPR), constitutes a combined effort by the U.S. to respond to rising oil prices and is part of a coordinated global release action by the International Energy Agency (IEA).
In the context of ongoing geopolitical risks and the Strait of Hormuz not yet reopened, the market generally believes that both the release and the exemption for Iranian oil are closer to &#34;short-term pain relief&#34; rather than a trend reversal—the medium-term direction of oil prices will still largely depend on the evolution of the situation in the Middle East.
<h2>Offshore buffer inventory sharply shrinks, supply pressure rises</h2>
According to Bloomberg, global offshore floating oil storage had once surged to over 140 million barrels at the end of last year, driven by multiple factors including U.S. pressure on India to reduce Russian oil purchases and accelerated Iranian exports.
However, since then, this inventory has nearly halved. According to Vortexa data, the current offshore floating storage is about 78 million barrels and continues to decline at a rate of 1.8 million barrels per day, one of the fastest consumption rates in recent years.
Of the current approximately 78 million barrels of offshore floating storage, about one-third comes from Iran, making Iranian offshore oil the most operationally viable supplementary source in the short term.
Yellen estimated that there are currently about 140 million barrels of Iranian oil offshore. According to Bloomberg analysis, this figure may refer to all oil in transit, including shipments already sold, and may not all be in a state ready for immediate delivery.
Goldman Sachs estimates that offshore Russian oil is about 131 million barrels, and Iranian crude oil is about 105 million barrels, together only enough to offset about two weeks of losses from disruptions in the Strait of Hormuz.
Previously, the U.S. had granted exemptions for Russian offshore oil, and this time the exemption has been extended to Iran, continuing Washington's policy approach of expanding offshore barrel oil access to stabilize prices
<h2>Exemptions Face Real Obstacles</h2>
Despite clear policy intentions, converting Iran's floating reserves into immediately available supplies is not straightforward. According to Bloomberg, entering this trading chain requires finding counterparties and arranging payment channels, while other sanctions remain in place.
Emma Li, Chief Analyst for the China market at Vortexa, stated:
<blockquote>
&#34;Mainstream importers will still be constrained by compliance, financing, and logistics, especially when exemptions are viewed as temporary or uncertain.&#34;
</blockquote>
This means that even if an exemption has been issued, there remains considerable uncertainty regarding the scale of Iranian oil that can quickly enter the market

The direct background of this exemption is the sharp decline in global offshore floating oil storage. Data shows that since the outbreak of the Middle East conflict, offshore crude oil and condensate floating storage has decreased at a rate of 1.8 million barrels per day, currently down to about 78 million barrels—of which about one-third comes from Iran

- The global offshore oil buffer inventory is depleting at an unprecedented rate, prompting the U.S. government to take action against rising oil prices.  
- On March 20, U.S. Treasury Secretary Yellen announced a 30-day authorization allowing the delivery and sale of Iranian oil onboard vessels, aiming to provide approximately 140 million barrels to the global market.  
- However, challenges remain in translating this authorization into immediate supply due to ongoing sanctions and logistical constraints faced by mainstream importers.

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Why "Temporary Exemption for Iranian Oil at Sea"? The U.S. "Forced by Circumstances": Global Crude Oil Buffer is Rapidly Decreasing