US lifts Russia oil sanctions to ease supply amid Hormuz blockage
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The news: The United States has temporarily lifted sanctions against Russia to allow the sale of Russian crude oil and petroleum products loaded on vessels until 11 April.
The context: The lift comes a day after the International Energy Agency (IEA) said it would release 400 million barrels of oil from their emergency reserves in an effort to ease surging global prices as the conflict in the Middle East shows no signs of easing.
The decision also marked a significant shift in America’s strategy toward Russia over its war in Ukraine. Russia has since faced sweeping sanctions from the United States and other members of the Group of 7 since its invasion of Ukraine in 2022.
US treasury secretary Scott Bessent said allowing more Russian oil into global markets could add hundreds of millions of barrels of crude supply, easing prices that have been hovering around USD100 ($141) a barrel. Around 130 million barrels of Russian oil are currently at sea, according to commodities data tracker Kpler.
What they said: "To increase the global reach of existing supply, Treasury is providing a temporary authorisation to permit countries to purchase Russian oil currently stranded at sea,” Bessent said in a social media post.
“This narrowly tailored, short-term measure applies only to oil already in transit and will not provide significant financial benefit to the Russian government, which derives the majority of its energy revenue from taxes assessed at the point of extraction,” he added.
