The United States has temporarily lifted sanctions on Russian oil, giving a boost to the Kremlin as Washington tries to rein in fuel prices that have been skyrocketed by the American-Israeli attack on Iran.
President Vladimir Putin’s team welcomed the move to ease penalties imposed over Russia’s aggression against Ukraine and pushed the US on Friday to go ahead..
The decision caused dismay in Europe, where officials feared a shift from Ukraine to the Middle East would provide a timely boost to Moscow’s war machine on their doorstep.
The announcement failed to immediately calm oil prices, which have spiraled since Tehran effectively closed the key Strait of Hormuz oil chokepoint and began attacking energy facilities across neighboring Gulf states.
Brent crude, the international benchmark, rose again overnight, rising above $100 a barrel as of 6 a.m. ET. Markets worldwide fell as US stock futures edged lower after declines across Asia and Europe.
Treasury Secretary Scott Besant, who announced the move on Thursday evening, said it would be able to buy Russian oil already at sea until April 11.
He called it a “narrowly designed, short-term measure” and said it would “not provide significant economic benefit to the Russian government.” (However, he later told NBC News’ British partner Sky News whether Moscow would benefit from the decision, saying it was “inevitable” and “unfortunate”.)
Today, about 124 million barrels of Russian oil are transported in ships around the world. The blockade of the Strait of Hormuz is preventing about 10 million barrels from entering the international market every day.
President Donald Trump, in a statement, said Besant was “taking decisive steps to promote stability in global energy markets and working to lower prices.”
He echoed a sentiment Trump had voiced at an earlier Truth Social on Thursday. Besant said the short-term disruption “will have huge long-term benefits for our nation and economy.”
The Kremlin was looking for an immediate boost. Despite Europe’s efforts to distance itself from Russian power, oil and gas are key to the Kremlin’s war chest, with China and India remaining critical buyers.
“The United States is admitting the obvious: without Russian oil, the global energy market cannot remain stable,” Putin’s special envoy Kirill Dmitriev said in a statement.
He called for a “further easing of restrictions on Russia’s energy resources”, saying the travel directive was “increasingly inevitable despite resistance from parts of the Brussels bureaucracy” – referring to the European Union.
Earlier on Friday, Dmitriev posted a Russian flag-waving post with the caption: “Buy Russian oil and gas to maintain balanced energy supply.” Dmitriev was in a US meeting with Trump’s team earlier in the week.
Putin’s spokesman Dmitry Peskov, meanwhile, told reporters that Russia recognized Washington’s “efforts to stabilize energy markets” and that “our interests in this matter coincide.”
This Russian positivity was not shared across Europe.
The British government was among those saying on Friday it would keep its own sanctions against Russian oil, fearing the consequences of the Trump administration’s decision.
During a visit to Saudi Arabia on Friday, the United Kingdom’s top diplomat, Foreign Secretary Yvette Cooper, accused Tehran and Moscow of supporting each other and “trying to hijack the global economy.”
Appearing at a joint news conference, the leaders of Germany and Norway voiced their opposition.
Friday’s fall illustrates the complexities involved as the US weighs two wars, each involving major energy producers.
The Strait of Hormuz is a 24-mile waterway that separates Iran and the Gulf states, and one-fifth of the world’s oil passes through it each year. Most ships refuse to go through it now, because it’s too dangerous (Iran has attacked several ships in the past few days) and insurance costs have ballooned.
The lifting of Russian sanctions is not a dramatic countermeasure as countries try to stave off the risk of a global financial shock. The International Energy Agency, a group of major producers, agreed this week to release a historic 400 million barrels of oil. This also failed to bring down the price.
