Washington: The United States has announced a temporary easing of restrictions on Russian oil sales in a bid to stabilize global energy markets. This decision comes amidst the ongoing Middle East conflict, which has seen Iran blocking the Strait of Hormuz. The US waiver permits countries to purchase Russian oil currently at sea until April 11.
According to France24.com, the short-term nature and technical limitations of this waiver mean it is unlikely to result in a substantial immediate financial gain for Russia. Kpler analyst Muyu Xu noted that the measure primarily allows Russian oil already in transit to complete its journey, describing it as a "wind-down, not reopening." US Treasury Secretary Scott Bessent emphasized that this move would not offer a significant financial benefit to the Russian government, as most of its energy revenue comes from taxes at the extraction point.
Kpler estimates that around 120 million barrels of Russian crude are currently at sea, which represents about two weeks of Russia's total oil output. However, most of this oil has already been pre-ordered by Chinese or Indian clients, limiting the potential for an immediate surge in orders. A similar waiver was previously granted to New Delhi, allowing Indian refiners to secure cargo at an advantage.
The waiver is seen as more symbolic than financially impactful for Russia. Richard Meade, editor-in-chief of Lloyds List Intelligence, described it as a "gift to Russia" in terms of sanctions. Although countries like Japan, Thailand, and the Philippines are reportedly considering purchasing Russian crude following the US decision, Muyu Xu pointed out that EU and UK sanctions remain in place, potentially deterring some buyers.
The Kremlin has welcomed the US decision, with economic envoy Kirill Dmitriev suggesting that further lifting of sanctions appears "inevitable" due to the volatile global energy market. Russian President Vladimir Putin offered to supply oil to Europe if it reverses its sanctions, but only on a "long-term" basis and free from "political pressure."
Beyond the US waiver, the general surge in oil prices since the Middle East conflict began has benefited Russia financially. The ESPO blend, predominantly bought by China and India, is trading significantly higher than before the conflict. Sergey Vakulenko of the Carnegie Endowment estimated that every $10 increase per barrel could bring an additional $1.6 billion monthly in tax revenues for Russia. A sustained $40 rise could potentially cover most of Russia's projected $50 billion deficit for 2025.
Despite the potential financial benefits, the decision has drawn criticism from Ukraine and Europe. Ukrainian President Volodymyr Zelensky expressed concerns that the sanctions relief does not aid peace. European leaders have also voiced their opposition, with Britain urging all partners to maintain pressure on Russia, and German Chancellor Friedrich Merz labeling the easing of sanctions as "wrong."