Trump Removes Sanctions On Russia To Help Oil Flow Amid Iran Conflict
The United States moved Thursday to temporarily loosen sanctions on Russian oil shipments already at sea, allowing them to reach international buyers as the Trump administration seeks to bring down global energy prices that have surged during the war in Iran.
The Treasury Department issued the temporary waivers, which will remain in effect until April 11. Treasury Secretary Scott Bessent said that releasing Russian oil currently stranded on tankers could inject hundreds of millions of barrels of crude into global supply, helping ease prices that have climbed close to $100 per barrel amid the conflict involving Iran.
The policy shift marked a notable change in Washington’s approach to punishing Moscow over its invasion of Ukraine.
Since Russia launched its full-scale invasion in 2022, the United States and other members of the Group of 7 have imposed sweeping sanctions aimed at restricting the Kremlin’s energy revenues. Those measures included placing a price ceiling on Russian crude and targeting a so-called “shadow fleet” of ships that exporters have used to transport oil while avoiding sanctions.
As the war with Iran has intensified, the Trump administration has been exploring ways to reduce economic strain tied to rising fuel costs. Last week, officials already allowed Russian oil that had been sitting offshore to proceed to India. At the same time, the administration has been working on a $20 billion maritime insurance guarantee through the U.S. International Development Finance Corporation, which typically provides financing and investment support for international businesses and projects.
Bessent said Thursday that the limited sanctions relief would not meaningfully strengthen Russia financially, though he acknowledged that Moscow could see some benefit.
“To increase the global reach of existing supply, Treasury is providing a temporary authorization to permit countries to purchase Russian oil currently stranded at sea,” he wrote 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.”
Speaking on a podcast Thursday, Bessent said it was “unfortunate” that Russia might receive any financial upside from the situation created by the Iran conflict, but he expressed hope that the benefit would last only a “micro period.”
Senior Democrats in the Senate sharply criticized the administration’s decision to loosen the sanctions, arguing that the move was meant to blunt the economic fallout from a war they blame on President Trump.
“This war has resulted in huge spikes in gas prices for Americans, who are now paying more at the pump than at any point in either of President Trump’s two terms,” they wrote in a joint statement.
The decision also represents a reversal from policies adopted last summer, when the administration imposed steep tariffs on India in response to its purchases of Russian oil.
“In one fell swoop we’ve undone a huge amount of pressure on Russia,” said Edward Fishman, a senior fellow and director of the Maurice R. Greenberg Center for Geoeconomic Studies at the Council on Foreign Relations.
According to the commodities analytics firm Kpler, roughly 130 million barrels of Russian crude are currently being transported at sea.
The administration’s move may also widen differences between Washington and European governments. Several European leaders have voiced concern over Trump’s military action against Iran and remain committed to maintaining strict economic pressure on Russia.
Fishman said he doubts the policy will succeed in lowering oil prices, pointing out that a similar decision last week allowing shipments to India did not produce a noticeable impact on the market. He also observed that Russian oil prices have been climbing since the conflict with Iran began and suggested that the temporary relief could eventually become permanent.
“I do worry that this is effectively the destruction of the oil sanctions on Russia,” said Mr. Fishman, the author of “Chokepoints: American Power in the Age of Economic Warfare.”
{Matzav.com}