U.S. Issues 30-Day License for Delivery and Sale of Russian Oil at Sea
The U.S. Treasury Department late on Thursday, March 12, announced it was issuing a general license authorizing the delivery and sale of Russian crude oil and petroleum products already loaded on tankers and at sea in a desperate attempt to stabilize global oil markets. It is the latest move by the Trump administration, which has attempted to slow the dramatic price increases as Iran vowed on Thursday to keep the Strait of Hormuz closed indefinitely and was confirmed to be laying mines in the waterway.
Saying the U.S. was taking “decisive steps to promote stability in global energy markets,” Treasury Secretary Scott Bessent said they were working to keep prices low. Oil has continued to hover around $100 a barrel after a brief spike earlier in the week to $120 a barrel, up from around $67 a barrel before the start of the bombing in Iran. Qatar and others have said oil was likely to reach $150 a barrel in a matter of days, while Iranian officials say they would drive it to $200 a barrel to destroy the global economy.
The U.S. license applies to all oil and products loaded on vessels as of March 12. It is a 30-day waiver of the sanctions, and is currently set to expire on April 11. It follows a similar waiver that the U.S. provided specifically to India last week.
Estimates vary on how much oil will be released or is “stranded at sea,” according to Bessent. Last week’s data showed that at least 60 million barrels had been loaded and could be moved within the 30-day exemption. Lloyd’s Intelligence cites data saying that 36 million barrels were on sanctioned tankers, with an additional 24 million barrels on other tankers in the global fleet.
A monthly analysis of Russian fossil fuel exports and sanctions by the Center for Research on Energy and Clean Air (CREA) shows that last month, 56 percent of Russia’s crude was carried by sanctioned shadow tankers. During the month, 63 shadow vessels were operating under false flags, with 23 vessels delivering $920.5 billion of Russian crude oil and oil products while flying a false flag.
Russian officials highlighted the waiver, saying the world was depending on it for stability. They said it would impact about 100 million barrels, while CNBC said it could reach as many as 124 million barrels. However, CNBC highlighted that it is only enough for five to six days of demand.
“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,” asserted Bessent. “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.”
The White House is taking the action as Donald Trump’s poll numbers on the economy remain weak. Affordability continues to be a major concern for average Americans, even before they were dealing with the shock at the gas pumps.
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The European Union and the UK have said they would not be following the United States in reducing sanctions on Russia. AFP is quoting Ukrainian President Volodymyr Zelensky, saying the U.S. move could give Russia about $10 billion in added income that could be applied to the war.
The temporary move to relax the sanctions followed a series of other steps the U.S. has announced or discussed in an attempt to slow the price increases. The Trump administration said it would release 172 million barrels of oil from the U.S. strategic reserves. It also floated the idea of suspending cabotage rules under the Jones Act, a move widely criticized by the U.S. maritime industry, which said the oil price spike was not related to transportation costs, but instead a cut in the world supply due to the war.
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