The US issued a 30-day waiver for countries to buy sanctioned Russian oil and petroleum products currently stranded at sea, in what Treasury Secretary Scott Bessent said was a step to stabilise global energy markets roiled by the Iran war. Oil prices eased on Friday morning in Asia after the US waiver announcement.
The move was the latest attempt by President Donald Trump's administration to tame energy prices after the US and Israeli strikes on Iran and the subsequent response by Tehran widened regional tensions and paralysed shipping through the Strait of Hormuz, disrupting vital Middle East oil and gas flows and sending energy prices higher.
On Wednesday, Washington announced it would be releasing 172 million barrels of oil from the strategic petroleum reserve in an effort to curb sky-rocketing oil prices in the wake of the war in Iran.
That release was part of a broader commitment by the 32-nation International Energy Agency to release 400 million barrels of oil.
The IEA said earlier on Thursday that the war in the Middle East was creating the biggest oil supply disruption in history.
The license issued by Washington on Thursday authorises the delivery and sale of Russian crude oil and petroleum products loaded on vessels as of March 12 and valid through midnight Washington time on April 11, according to the text of the license posted on the Treasury Department's website.
The move reflects White House worries that the surge in oil prices after nearly two weeks of US and Israeli strikes on Iran will hurt US businesses and consumers ahead of the November midterm elections, when Trump's fellow Republicans hope to retain control of Congress.
Bessent, in a statement on social media released hours after benchmark oil prices shot above $100 a barrel, said the measure was "narrowly tailored" and "short-term" and would not provide significant financial benefit to the Russian Government.
"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," Bessent said in the statement, echoing Trump.
There were about 124 million barrels of Russian-origin oil on water across 30 different locations globally as of Thursday, Fox News reported, adding that the US license would provide around five to six days of supply when taking into account the daily loss of oil from the Strait.
Even as the sanctions reprieve was expected to boost world supplies of oil, it could also complicate the West's efforts to deprive Russia of revenue for its war in Ukraine and put Washington at odds with its allies.
European Commission President Ursula von der Leyen, after participating in a call with G7 leaders on Wednesday to discuss the impact of the Iran war on oil and gas markets, said now was not the time to relax sanctions against Russia.
Also on Thursday, Russian presidential envoy Kirill Dmitriev said he had discussed the current energy crisis with a US delegation that included Trump's special envoy Steve Witkoff and Trump's son-in-law Jared Kushner at a meeting in Florida.
The US Treasury previously issued a 30-day waiver on March 5 specifically for India, allowing New Delhi to buy Russian oil stuck at sea.
Trump has also ordered the US International Development Finance Corporation to provide political risk insurance and financial guarantees for maritime trade in the gulf and said the US Navy could escort ships in the region.
In another attempt to control prices, the Trump administration is considering temporarily waiving a shipping rule known as the Jones Act to ensure energy and agricultural products can move freely between US ports, the White House said.
Waiving the rule would allow foreign ships to carry fuel between US ports, potentially lowering costs and speeding deliveries. "The president is taking every action he can to lower prices...and you're going to see more and more in the days to come," White House Deputy Chief of Staff Stephen Miller told Fox News' "Primetime" program on Thursday.
Trump said earlier on Thursday the United States stood to make significant money from oil prices driven higher by the war, prompting expected criticism from opposition lawmakers who accused him of, "caring only about rich people."
(Reporting by Ismail Shakil, Christian Martinez and Jasper Ward; editing by Dan Burns and Lincoln Feast.)