US eases some Russian oil sanctions but crude prices stay high
[March 14, 2026] By
DAVID McHUGH
The U.S. is temporarily easing some sanctions on Russian oil shipments,
reflecting global concerns over sharply higher crude prices due to
supply shortages stemming from the Iran war.
The move, intended to soothe jittery markets over the disruption of
Middle Eastern oil and gas supplies, underlines how the war has boosted
Moscow's ability to profit from its energy exports, a pillar of the
Kremlin’s budget as it presses its invasion of Ukraine.
U.S. sanctions will not apply for 30 days on deliveries of Russian oil
that's been loaded on tankers as of Thursday, U.S. Treasury Secretary
Scott Bessent said on X. That would give reluctant purchasers a green
light to take the oil without worrying that they will run afoul of U.S.
sanctions rules.
The Trump administration earlier had granted a 30-day reprieve to
refineries in India.
Bessent said the “narrowly tailored, short-term measure” was part of
President Donald Trump's “decisive steps to promote stability in global
energy markets” and to “keep prices low."
Allowing the sale of stranded Russian oil would provide no additional
financial benefit for the Russian government because the Kremlin already
taxed the oil when it was extracted from the ground, Bessent said.
Washington has sanctioned Russia's two biggest oil companies, Lukoil and
Rosneft, as part of efforts to end the fighting in Ukraine. Except for
the 30-day reprieve for floating oil, those sanctions remain in place.
Kremlin spokesman Dmitry Peskov said Friday the move will help stabilize
global energy markets, adding it was impossible to do so "without
significant volumes of Russian oil.”
But Ukrainian President Volodymyr Zelenskyy said the action “does not
help peace.”
“This easing alone by the United States could provide Russia with about
$10 billion for the war,” Zelenskyy said. “It spends the money from
energy sales on weapons, and all of this is then used against us.”
Oil prices stayed high after the announcement
The price of international benchmark Brent crude eased after the
announcement but soon rose again, breaking through $100 to trade at
$103.24 per barrel as of 1800 GMT (2 p.m. EDT) Friday. That is still
well above $72.87, where Brent traded on Feb. 27, the eve of the war.
The fighting has choked off most tanker transport through the Strait of
Hormuz at the mouth of the Persian Gulf, through which 20% of the
world's oil supply typically passes. That has dealt a massive energy
shock to the global economy and threatened increased inflation around
the world.
“In the short term this slightly increases available supply on the
global market, which helps contain the current spike in oil prices,”
said Simone Tagliapietra, an energy expert at the Bruegel think tank in
Brussels. “The impact on prices should therefore be modestly downward,
or at least stabilizing.”
Analysts estimate about 125 million barrels of Russian oil are currently
being shipped. That equals five or six days' worth of normal shipments
through the Strait of Hormuz, or a bit over one day's worth of global
consumption of about 101 million barrels per day.
Sanctions have cut into Russia's oil revenues.
After President Vladimir Putin ordered his full-scale invasion of
Ukraine in 2022, the European Union — once Moscow's biggest customer —
stopped taking Russian oil, and many Western customers also shunned it.
Instead, the oil flowed to China and India, where it sold for a discount
due to efforts by the U.S., the EU and Kyiv's other allies to impose a
price cap on Russian oil that was enforced through shipping and
insurance companies.
[to top of second column] |
Russian President Vladimir Putin chairs a meeting with members of
the Security Council via videoconference at the Kremlin in Moscow,
Russia, Friday, March 13, 2026. (Gavriil Grigorov, Sputnik, Kremlin
Pool Photo via AP)
 Over time, Russia was able to dodge
the cap by lining up a fleet of used tankers with obscure ownership
and insurance based in countries that weren't observing the cap.
Along with the sanctions on Lukoil and Rosneft, Ukraine's allies
penalized more and more of the individual vessels in Russia's
“shadow fleet.” Customers in China and India started demanding even
bigger discounts to compensate for the risk of running afoul of
sanctions, for the hassle of concealing the origin of the oil, or
for finding workarounds that skirted banks reluctant to handle
payments for sanctioned oil.
In December, Russia's Urals blend traded under $40 per barrel, some
$25 below Brent. That slashed the Kremlin's oil revenues to their
lowest levels since the invasion. Oil and gas exports typically
supply 20% to 30% of the federal budget.
Rising oil prices boost Russia's market position
Russian oil has risen along with oil prices generally and now trades
at over $80 per barrel — a boost to its financial fortunes if
disruptions continue in the Strait of Hormuz and keep prices high
while refineries in Asia need to replace supplies no longer
available from the Middle East.
Russia’s daily revenue from oil sales during the Iran war has been
on average 14% higher than in February, according to the nonprofit
Centre for Research on Energy and Clean Air. Russia has been earning
510 million euros ($588 million) every day this month from oil and
liquefied natural gas exports, according to Isaac Levi of the CREA.
But there's still a big discount to Brent due to sanctions. The
latest U.S. move “likely narrows the Urals discount somewhat" by
reducing sanctions risk, Tagliapietra said. But since it's limited,
the U.S. move "does not fundamentally change the structure of
longer-term Russian oil flows or sanctions pressure.”
Former Russian Central Bank official Sergei Aleksashenko said the
move “will not be a very significant boost” to the Russian budget
because the oil was going to find buyers anyway -- especially given
the disruptions to the Strait of Hormuz.
The Trump administration may not have been ready for such a dramatic
spike or for a prolonged war, said Aleksashenko, head of economics
at the NEST Centre, founded by exiled Russian tycoon and opposition
figure Mikhail Khodorkovsky.
Now that gasoline prices in the U.S. have risen along with oil, “the
president should say something, that 'I'm dealing with the
problem,'" he said. That includes the break for India and the
release along with other countries of 400 million barrels of
strategic oil reserves.
“In my view it's more rhetoric and perception," he said.
German Chancellor Friedrich Merz said leaders of the Group of Seven
democracies discussed Russian oil with Trump this week and that “six
members expressed a very clear view that this is not the right
signal to send.”
—-
Kostya Manenko in Tallinn, Estonia, and Kwiyeon Ha in London
contributed.
All contents © copyright 2026 Associated Press. All rights reserved |
