Desk: In a major move to control soaring crude oil prices and amid escalating tensions with Iran, the US government under President Donald Trump has temporarily lifted sanctions on Russian crude oil and petroleum products stuck at sea. The decision aims to increase global oil supply and curb prices that have crossed $100 per barrel.
According to a new ‘General License’ issued by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC), the exemption will remain in effect only until April 11, 2026. The license applies exclusively to Russian oil cargos loaded onto ships before midnight on March 12 and currently stranded at sea. Treasury Secretary Scott Bessent stated that this move will release millions of barrels of crude oil into the market, helping to control prices driven up by the Iran crisis.
Sanctions Imposed After Ukraine War
Following Russia’s invasion of Ukraine in 2022, the US and G7 nations imposed strict price caps and sanctions on Russian oil. However, the ongoing Middle East conflict has forced the US to reconsider its priorities. Experts view this as a significant shift in America’s efforts to penalize Russia.
Hormuz Strait Crisis
The recent spike in oil prices is primarily due to the effective closure of the strategic Hormuz Strait. Iran’s new Supreme Leader Mojtaba Khamenei has indicated blocking this route, pushing international oil prices above $100 per barrel. Closure of the Hormuz Strait threatens around 20% of the world’s oil supply.
Short-term Measure, Not Benefiting Russia
Treasury Secretary Scott Bessent clarified on social media that this is a short-term measure. “The exemption applies only to oil in transit and will not provide any significant financial gain to the Russian government. President Trump is taking decisive action to promote stability in global energy markets and keep prices in check,” he said.
US Navy Not Fully Prepared for Escorts
US Energy Secretary Chris Wright acknowledged that the US Navy is not fully ready to escort tankers. “It will take time to secure tankers passing through the Hormuz Strait, which is why the supply of Russian oil at sea has been temporarily allowed as an alternative,” he said.
Global Relief
The US decision could provide relief to countries like India and China, allowing them to purchase Russian cargos at sea without legal risks. However, it remains to be seen whether this temporary exemption until April 11 will be sufficient to prevent a global economic slowdown.