US allows countries to buy Russian oil stranded at sea for 30 days

US issues 30-day sanctions waiver for purchase of Russian oil at sea

By Ismail Shakil

US Waiver on Russian Oil: Details, Impact, and Global Reactions

March 12 (Reuters) - The United States issued a 30-day waiver for countries to buy sanctioned Russian oil and petroleum products currently stranded at sea, in what Treasury Secretary Scott Bessent said was a step to stabilize global energy markets roiled by the Iran war.

Immediate Market Response

Oil prices eased on Friday morning in Asia after the U.S. waiver announcement.

Background and Context

US Actions to Stabilize Energy Prices

The move was the latest attempt by President Donald Trump's administration to tame energy prices after the U.S. and Israeli strikes on Iran and the subsequent response by Tehran widened regional tensions and paralyzed shipping through the Strait of Hormuz, disrupting vital Middle East oil and gas flows and sending energy prices higher.

Strategic Petroleum Reserve Release

On Wednesday, Washington announced it would be releasing 172 million barrels of oil from the strategic petroleum reserve in an effort to curb sky-rocketing oil prices in the wake of the war in Iran. That release was part of a broader commitment by the 32-nation International Energy Agency to release 400 million barrels of oil. 

IEA's Assessment of the Crisis

The IEA said earlier on Thursday that he war in the Middle East was creating the biggest oil supply disruption in history.

Details of the Sanctions Waiver

The license issued by Washington on Thursday authorizes the delivery and sale of Russian crude oil and petroleum products loaded on vessels as of March 12 and valid through midnight Washington time on April 11, according to the text of the license posted on the Treasury Department's website.

Political and Economic Implications

White House Concerns and Election Context

The move reflects White House worries that the surge in oil prices after nearly two weeks of U.S. and Israeli strikes on Iran will hurt U.S. businesses and consumers ahead of the November midterm elections, when Trump's fellow Republicans hope to retain control of Congress.

Treasury Secretary's Statement

Bessent, in a statement on X released hours after benchmark oil prices shot above $100 a barrel, said the measure was "narrowly tailored" and "short-term" and would not provide significant financial benefit to the Russian government.

"The temporary increase in oil prices is a short-term and temporary disruption that will result in a massive benefit to our nation and economy in the long-term," Bessent said in the statement, echoing Trump.

Volume of Russian Oil Affected

There were about 124 million barrels of Russian-origin oil on water across 30 different locations globally as of Thursday, Fox News reported, adding that the U.S. license would provide around five to six days of supply when taking into account the daily loss of oil from the Strait.

International Reactions and Further Measures

Potential Complications for Western Policy

Even as the sanctions reprieve was expected to boost world supplies of oil, it could also complicate the West's efforts to deprive Russia of revenue for its war in Ukraine and put Washington at odds with its allies.

European and Russian Responses

European Commission President Ursula von der Leyen, after participating in a call with G7 leaders on Wednesday to discuss the impact of the Iran war on oil and gas markets, said now was not the time to relax sanctions against Russia.

Also on Thursday, Russian presidential envoy Kirill Dmitriev said he had discussed the current energy crisis with a U.S. delegation that included Trump's special envoy Steve Witkoff and Trump's son-in-law Jared Kushner at a meeting in Florida.

Previous Waivers and Additional US Actions

The U.S. Treasury previously issued a 30‑day waiver on March 5 specifically for India, allowing New Delhi to buy Russian oil stuck at sea.

Trump has also ordered the U.S. International Development Finance Corporation to provide political risk insurance and financial guarantees for maritime trade in the Gulf and said the U.S. Navy could escort ships in the region. 

Consideration of the Jones Act Waiver

In another attempt to control prices, the Trump administration is considering temporarily waiving a shipping rule known as the Jones Act to ensure energy and agricultural products can move freely between ​U.S. ports, the White House said. Waiving the rule would allow foreign ships to ​carry fuel between U.S. ​ports, potentially lowering ⁠costs and speeding deliveries.

White House Commitment to Lowering Prices

"The president is taking every action he can to lower prices ... and you're going to see more and more in the days to come," White House Deputy Chief of Staff Stephen Miller told Fox News' "Primetime" program on Thursday.

Political Criticism

Trump said earlier on Thursday the United States stood to make significant money from oil prices driven higher by the war, prompting criticism from some lawmakers who accused him of caring only about rich people.

(Reporting by Ismail Shakil, Christian Martinez and Jasper Ward; editing by Dan Burns and Lincoln Feast.)