US Temporarily Lifts Sanctions on Russian Oil Amidst Global Price Concerns

Washington – In a move to stabilize global energy markets, the U.S. Treasury Department has temporarily authorized the purchase of Russian oil already at sea, despite ongoing sanctions related to the conflict in Ukraine and recent attacks on Iran. This decision comes as global oil prices have remained elevated, trading around $100 a barrel, following disruptions to supply chains and heightened geopolitical tensions.

Temporary Waiver Details

The temporary authorization, announced on Thursday, March 12, 2026, allows countries to purchase Russian crude oil and petroleum products that were loaded onto vessels as of March 12, 2026. These purchases are permitted through April 11, 2026. The license applies specifically to oil already in transit, aiming to address a backlog of approximately 124 million barrels of Russia-origin oil currently located across 30 global locations as of March 12.

Rationale Behind the Decision

Treasury Secretary Scott Bessent explained the move as a “narrowly tailored, short-term measure” designed to increase global oil supply and mitigate a surge in prices triggered by the effective closure of the Strait of Hormuz, a critical waterway for global oil transport CNN. The closure of the strait, flanked by Iran, has significantly reduced oil flow, estimated at 13-14 million barrels per day, exceeding Russia’s daily production of around 10 million barrels CNN.

Bessent emphasized that the authorization would not provide substantial financial benefits to the Russian government, as the majority of its energy revenue is derived from taxes assessed at the point of extraction CNN. The intention is to address a “temporary disruption” and avoid broader economic consequences.

Market Response

Despite the U.S. Decision, global oil prices have shown limited movement. Brent crude, the global benchmark, edged down 0.2% to just over $100 a barrel, even as WTI, the U.S. Benchmark, decreased by 1% to nearly $95 a barrel CNN. Prices remain elevated due to ongoing concerns about supply disruptions and the continued closure of the Strait of Hormuz, with Iran’s new supreme leader, Mojtaba Khamenei, vowing to maintain the blockade CNBC.

Looking Ahead

The temporary waiver on Russian oil sanctions is expected to provide a limited buffer against rising prices, but the long-term impact will depend on the resolution of geopolitical tensions and the restoration of normal oil flows through the Strait of Hormuz. The situation remains fluid, and further adjustments to energy policy may be necessary to ensure market stability WIONews.