Washington has temporarily waived sanctions on some Russian oil and petroleum shipments, the U.S. Treasury Department announced Thursday, removing a tool previously used to pressure Russia to end its war in Ukraine economically.
The waivers, which will remain in place until April 11, would allow buyers to purchase some previously sanctioned oil and petroleum products stranded at sea. The move would potentially add millions of barrels of Russian oil to global markets and ease crude prices as Iran continues its effective blockade of the Strait of Hormuz.
Treasury Secretary Scott Bessent confirmed Thursday that the move was intended to stabilize global energy markets and said it was “unfortunate” that Russia could profit from the temporary sanctions relief.
Russian economic envoy Kirill Dmitriev said Friday that the move was “inevitable,” adding that “without Russian oil, the global energy market cannot remain stable.”
Secretary of the Treasury Scott Bessent …
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The Treasury Department announced a similar move last week, covering Russian oil already traveling at sea that was set to be sold to India. That action marked a sharp reversal in U.S. policy, which had sought to push India to pivot away from Russian oil as a pressure tactic during negotiations over ending the war in Ukraine.
The U.S. is also offering a $20 billion maritime insurance backstop through the U.S. International Development Finance Corp., which could provide government-backed coverage for ships traveling in the Strait of Hormuz.
Crude prices have hovered around $80 all week, but inched closer to $100 per barrel on Thursday as Iran struck more ships traveling in the Persian Gulf and the Strait of Hormuz.
At least 20% of the world’s oil travels through the Strait of Hormuz each year, and Iran’s threats on tankers in the region have severely reduced traffic. Iranian Supreme Leader Ayatollah Mojtaba Khamenei, in his first public statement Thursday, declared Iran would continue to keep the strait closed as leverage in its war against the U.S. and Israel.
Oil prices inched downward in Asian markets on Friday after the Treasury announcement.
The move comes after the 32-nation International Energy Agency announced Wednesday it would release 400 million barrels of oil from its strategic reserves. The move did little to immediately calm energy markets, which continued to climb on Thursday.
