Democrats have demanded that Russia withdraw oil sales to India

Democrats in Congress are demanding that the Trump administration immediately withdraw sanctions waivers that allow Indian refiners to buy Russian oil as the Iran war wreaks havoc on global energy markets.

“Your recent decision to provide a 30-day waiver is dangerous, self-defeating and unjustifiable,” Rep. Sam Liccardo, D-Calif., and Sen. Rep. Ruben Gallego, D-Ariz., wrote a letter to Treasury Secretary Scott Besant, which was shared exclusively with CNBC. “This waiver constitutes an inexplicable act of material benefit to the enemy.”

The Treasury Department last week issued a temporary 30-day embargo to allow India to buy Russian oil, in an effort to ease soaring oil prices caused by the war and traffic shutdowns in the Strait of Hormuz.

The oil surge comes eight months before November’s midterm elections that flip the House of Representatives and the Senate to Democratic control, and polls show voters are getting pessimistic about President Donald Trump’s handling of the economy.

After the sanctions were lifted, however, Russia has reportedly been helping Iran target US ships, aircraft and bases in the region. Gallego and Liccardo warned in the letter against temporarily lifting the sanctions, which would reward Russia with air strikes as it helps target US forces in the Middle East.

“Instead of maintaining the necessary contingency planning to provide alternative sources to India and other allies, the administration’s unfortunate approach has allowed Russia and other adversaries to benefit from oil reserves previously restricted by sanctions, supporting Russian efforts to harm US forces and obstruct US intelligence,” Gallego and Liccardo wrote in the letter. “By providing this waiver, you have indicated that the United States will reward attacks on our soldiers, not deter them.”

About 20% of the world’s oil and gas moves through the Strait of Hormuz, which has been largely impossible since the start of the US and Israeli occupation of Tehran.

Oil prices rose within days of the start of the war. US crude rose to $108 per barrel on Sunday, as compared to the global benchmark BrentIt quickly reached $110 a barrel. That sent U.S. gasoline prices up, jumping to $3.44 per gallon on Sunday, according to GasBuddy.

The price hikes come as both parties try to win over economically interested voters ahead of the November midterm elections that will decide whether Democrats or Republicans will control Congress in Trump’s final years. Trump promised lower spending, including gas prices, during his 2024 campaign — but his approval rating on the economy has plummeted as voters worry about affordability.

Liccardo and Gallego, who are members of the House Financial Services Committee and the Senate Banking Committee, argue in their letter that the war is making life less affordable for Americans.

“A protracted conflict with Iran and widespread military operations across the Middle East will deepen the energy-cost crisis, burden Americans to pay more at the pump and exacerbate the affordability crisis facing too many Americans,” he wrote.

Meanwhile, millions of barrels of Russian oil are stuck at sea due to US sanctions imposed as punishment for Russia’s invasion of Ukraine.

Energy Secretary Chris Wright defended the move to temporarily allow Russian oil to be sold in India, calling it a “pilot step” that would eventually divert oil sold to China. He added that this would help offset price increases in the immediate term until the US achieves its military goals in Iran.

“We are not helping Russia by accelerating their oil sales to stem the rise in fuel prices and keep European and Asian refiners in oil,” Wright said. “We are doing practical things to get through the short period that will usher in an era of lower energy prices.”

Pressed on reports of Russian intelligence sharing, Wright said, “There are rumors about it, we don’t know if it’s true or not.”

He said: “Russia is an expert in creating trouble around the world.”

Liccardo and Gallego asked Besant if he planned to continue the waiver if the Strait of Hormuz was closed. He asked whether the Treasury Department had advance notice of intelligence sharing between Russia and Iran and whether there were any conditions that could lead to the waiver being revoked.

The pair requested information on any emergency oil price stabilization plans the administration had before launching an attack on Iran.

“The questions below address two different lines of accountability. The first concerns the specific waiver decision and its immediate implications for sanctions integrity, energy markets, and troop security,” he wrote. “The second relates to the administration’s planning failures prior to its unauthorized military action, and the absence of coordination with allies and partners, whose cooperation is essential to maintaining the American sanctions architecture, that this waiver now undermines.”