By Ginika Igboke
The U.S. Treasury Department issued a license on March 12 temporarily allowing countries to purchase Russian crude oil and petroleum products that are currently stranded at sea.
The license, which is valid until April 11, authorizes the delivery and sale of Russian crude oil and petroleum products that had already been loaded onto ships as of March 12, according to a document released by the Treasury Department’s Office of Foreign Assets Control (OFAC).
Treasury Secretary Scott Bessent said on X that the United States issued the 30-day license to “promote stability in global energy markets” and help keep prices down amid the ongoing conflict with Iran.
“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,” he said.
“The temporary increase in oil prices is a short-term disruption that will result in a massive benefit to our nation and economy in the long term.”
The escalating conflict in the Middle East has caused many tankers to stop transiting the Strait of Hormuz, a vital maritime chokepoint for global oil and gas shipments.
Oil prices have risen sharply since U.S.–Israeli military operations against Iran began at the end of February. Iran has responded with a series of strikes on Israel and U.S. bases in Gulf nations.
Brent crude, the international benchmark for oil prices, jumped to $101 per barrel in overseas trading on March 12.
To help ease rising prices, members of the International Energy Agency agreed on March 11 to release 400 million barrels of oil from their reserves—the largest withdrawal on record. The United States will contribute 172 million barrels from the Strategic Petroleum Reserve.
Each country will release its emergency stockpiles into the market over a set time frame, with some nations taking additional measures beyond the coordinated release.
“This will take approximately 120 days to deliver based on planned discharge rates,” U.S. Energy Secretary Chris Wright said in a statement on March 11.
“Unlike the previous administration, which left America’s oil reserves drained and damaged, the United States has arranged to more than replace these strategic reserves with approximately 200 million barrels within the next year—20 percent more barrels than will be drawn down—and at no cost to the taxpayer,” he added.
Shipments of crude and refined fuel through the Strait of Hormuz have fallen from about 20 million barrels per day before the Iran conflict to “a trickle,” according to a recent report by the International Energy Agency. The agency warned that supply losses could worsen if shipping does not resume soon.
The agency also said oil producers in the Middle East are reducing or shutting down production because ships are unwilling or unable to load cargo.
Last week, the United States granted India a 30-day waiver to purchase Russian crude oil already in transit. Washington had earlier raised tariffs on India over its imports of Russian oil as part of efforts to limit funding for Russia’s war in Ukraine.
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