US Treasury Gives Green Light for Sale of More Russian Oil
(Bloomberg) -- The US has issued its second authorization for buyers to take Russian oil cargoes already at sea, widening a temporary waiver given last week to India alone in an effort to ease pressure on prices as the war in the Middle East continues.
Treasury Secretary Scott Bessent, in a social media post, said the move was designed to be a “narrowly tailored, short-term measure” that “applies only to oil already in transit and will not provide significant financial benefit to the Russian government.”
The US government has taken a number of steps to tame spiking crude and fuel prices since strikes on Iran began almost two weeks ago, such as the planned release of 172 million barrels from its emergency oil reserve. It has floated other ideas, ranging from intervention in the futures markets to waiving a century-old law that requires US ships be used to transport goods between American ports.
The impact has not yet been dramatic, however, with Brent crude trading around $100-a-barrel on Friday.
Analysts said the latest move to add supply would be welcomed, but did not represent a fix.
“Of course any supply helps, but this is a smaller help than it looks,” said Robert Rennie, head of commodity research at Westpac Banking Corp. He estimated that out of 125 million to 150 million barrels of Russian crude on the water, about a third is off China and likely to end up in storage, with 30 million to 40 million barrels in India and likely to be consumed there. The rest is in the Mediterranean and the Atlantic.
“We are only really talking about replacing maybe four or five days of lost Gulf exports. Sure, it helps, but it is no panacea,” he added.
The latest measure, which expands upon a temporary waiver granted to India last week, applies to oil loaded before March 12 and runs for a month — limiting the number of vessels that can reach major buyers in time.
According to Bloomberg ship-tracking data, about 30 vessels in Asian waters are carrying Russian crude and products that are potentially available for purchase. The vessels are signaling “for orders” — meaning they have no clear destination yet — or targeting Singapore or Malaysia, waters where tankers tend to linger while cargoes are sold.
Bessent has previously suggested the US could “unsanction” additional Russian oil to ease price pressure.
“If oil prices spike again, perhaps because Iran steps up its attacks on oil tankers in the Strait of Hormuz, pressure to lift Russia sanctions will build further,” Robin Brooks, a senior fellow at the Brookings Institution, said in a social media post.
Bessent said earlier on Thursday that any benefit for Russia from US actions would be “unfortunate” and short-term. “We hope that it will be a micro period that they will benefit,” he said on the Master Investor Podcast with Wilfred Frost.
(Adds quote, detail on floating cargoes.)
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