WASHINGTON (AP) — The United States has authorized the temporary purchase of Russian oil already on ships at sea, a move aimed at stabilizing global energy markets rattled by conflict in West Asia involving Iran. Treasury Secretary Scott Bessent announced the measure Thursday, describing it as a “narrowly tailored, short-term” solution.
The decision comes as oil prices have experienced significant volatility since the start of the Iran war, briefly nearing $120 a barrel earlier this week. Global benchmark Brent crude closed just above $100 per barrel Thursday, following vows from Iran’s new supreme leader, Mojtaba Khamenei, to keep the Strait of Hormuz closed.
According to CNBC, approximately 124 million barrels of Russian-origin oil are currently afloat across 30 locations worldwide, representing roughly five to six days of global supply as of March 12.
Bessent stated the temporary increase in oil prices represents a short-term disruption that will ultimately benefit the U.S. economy. He also emphasized that the measure is not expected to provide a substantial financial windfall to the Russian government, as most of Moscow’s energy revenue is generated from taxes levied at the point of extraction.
The Treasury Department outlined in a notice that the exemption applies to Russian crude products loaded onto ships on or before 12:01 a.m. Eastern time, with purchases permitted until April 11 at the same time.
The U.S. also granted a 30-day waiver to India last week, allowing the country to continue purchasing Russian crude. Bessent reiterated that this waiver, like the broader authorization, is not intended to significantly benefit Russia, as it pertains only to oil already in transit.
“It was unfortunate that Russia will benefit financially from this move, but we hope that it will be [for] a micro period,” Bessent said in a recent podcast interview. He explained the waiver was granted because “the Russian barrels are on the water, and it is a quick source for the Indian refineries.”
The move comes against a backdrop of existing sanctions imposed by the G7 and the European Union on Russian oil following the 2022 invasion of Ukraine, including a price cap of $44.1 per barrel. The EU has also committed to phasing out all remaining oil imports from Russia by the end of 2027.
The U.S. previously banned imports of Russian oil, liquefied natural gas, and coal in 2022 under the Biden administration.
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