US-Russia Oil Sanctions

This decision comes amid major disruptions to the global oil supply caused by the ongoing war and Iran’s strategic closure of the critical Strait of Hormuz, through which a significant portion of the world’s oil exports typically passes.

The deepening war with Iran has exposed the limits of U.S. diplomacy amid a growing global energy crisis. Oil prices have surged past $100 per barrel, forcing the U.S.—which had aimed to economically isolate Russia—to reconsider its sanctions strategy. The Trump administration’s decision to lift restrictions on Russian oil sales, allowing India and other countries to purchase, underscores how America’s “sanctions-first” policy is now backfiring. The blockade of the Strait of Hormuz has dealt a significant blow to U.S. leverage, signaling that Washington’s ability to control global energy markets has weakened. This development is not only a diplomatic setback but also tarnishes America’s image as a superpower capable of dictating terms worldwide.

The move comes as the ongoing war has severely disrupted global oil supply and Iran strategically closed the Strait of Hormuz, a vital chokepoint through which a large portion of the world’s oil exports flows.

On Thursday, the U.S. Treasury Department announced the issuance of a temporary license allowing delivery and sale of Russian crude oil and petroleum products already loaded on ships until March 12, valid until midnight April 11 (Washington time). This license could unlock access to roughly 124–125 million barrels of Russian oil stranded at around 30 locations worldwide, helping alleviate immediate supply shortages caused by disruptions in Gulf shipping routes.

This latest exemption follows a separate 30-day license issued on March 5, which allowed India to purchase stranded Russian oil, providing importers some relief amid the supply crunch.

U.S. Treasury Secretary Scott Beasent described the step as “carefully considered” and short-term, emphasizing that Moscow would gain no significant economic benefit. Earlier this week, Trump indicated that his administration was willing to ease certain sanctions to compensate for sudden disruptions in oil supply, stating, “We have restrictions on some countries. Until the Strait opens again, we are lifting those restrictions.”

The announcement followed a statement from the U.S. Energy Department, which said it would release 172 million barrels from the Strategic Petroleum Reserve to help stabilize prices after the Iran conflict began. This is part of a broader coordinated effort with the International Energy Agency (IEA), whose 32 member countries have pledged to release roughly 400 million barrels of oil, citing the conflict as causing the largest supply disruption in history.

As U.S. and Israeli attacks on Iran intensify and Tehran targets Gulf shipping lanes and energy infrastructure, oil prices have once again surged above $100 per barrel. Prior to the February 28 strikes on Iran, crude was trading around $73–75 per barrel.

Since the onset of the war, Iran has effectively blocked the Strait of Hormuz, a narrow but critical shipping route connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. Typically, 20–25% of the world’s daily oil consumption passes through this corridor. Reports indicate at least 16 ships have been attacked in the region, with Tehran warning of further strikes.

In his first public statement since taking office, Iran’s new Supreme Leader Mojtaba Khamenei emphasized that the Strait must remain closed, signaling that the normal flow of oil from the Persian Gulf is unlikely to resume anytime soon.