US Relaxes Russian Oil Sanctions Amid Rising Energy Costs

The United States has temporarily lifted sanctions on Russian oil currently at sea, allowing shipments to reach buyers around the world.

The decision, according to a report by the New York Times, comes as the administration of Donald Trump attempts to curb rising global energy prices linked to the ongoing conflict involving Iran.

The exemptions were issued by the United States Department of the Treasury and will remain in place until April 11.

Treasury Secretary Scott Bessent on Thursday said the move could release large volumes of crude oil into the global market.

He estimated that freeing Russian oil could add hundreds of millions of barrels to supply. Prices have been hovering near $100 per barrel due to the conflict involving Iran.

The decision marks a notable shift in Washington’s strategy toward Russia over its war in Ukraine.

Since Moscow’s invasion of Ukraine in 2022, the United States and other members of the Group of Seven have imposed strict sanctions on Russia. These include a price cap on Russian oil and restrictions targeting a “shadow fleet” of vessels used to bypass sanctions.

As tensions with Iran escalated, the Trump administration sought ways to ease economic pressure caused by rising energy costs.

Last week, the administration also allowed Russian oil that had been stranded at sea to be delivered to India.

It is also working on a $20 billion maritime insurance backstop through the U.S. International Development Finance Corporation, which typically provides financing and investment support for overseas projects.

Bessent said the temporary measure would not significantly benefit the Russian government.

“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.”

In a podcast interview on Thursday, Bessent described it as “unfortunate” that Russia could gain financially from the situation.

He added that he hoped the benefit to Moscow would last only a “micro period.”

However, the move drew criticism from Senate Democrats. They argued that the administration was easing sanctions to manage the consequences of a war triggered by 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 said in a joint statement.

The decision also marks a reversal from last summer, when the administration doubled tariffs on India over its purchases of Russian oil.

Analysts say the policy change could weaken pressure on Russia.

Edward Fishman, a senior fellow and director of the Maurice R. Greenberg Center for Geoeconomic Studies at the Council on Foreign Relations, warned that the move could undo previous sanctions efforts.

“In one fell swoop we’ve undone a huge amount of pressure on Russia,” he said.

Data from commodities tracking service Kpler shows that about 130 million barrels of Russian oil are currently at sea.

The policy could also deepen divisions between the United States and Europe. European leaders have been skeptical of Trump’s military actions involving Iran and want to maintain economic pressure on Russia.

Fishman also questioned whether the sanctions relief would actually reduce oil prices.

He noted that allowing Russian oil shipments to India last week did not affect global prices.

“The price of Russian oil had been rising since the war in Iran started,” he said.

“I do worry that this is effectively the destruction of the oil sanctions on Russia,” added Fishman, author of the book Chokepoints: American Power in the Age of Economic Warfare