The United States has temporarily relaxed sanctions on Russian oil to help ease global energy prices amid the US-Israel conflict with Iran, a move that also provides a timely boost to the Kremlin. Treasury Secretary Scott Bessent announced the measure on social media, expanding last week’s limited waiver on Russian cargoes bound for India to allow sales of Russian oil already at sea to countries beyond India.
Bessent described the step as temporary and narrowly tailored, saying it applies only to oil already in transit and will not substantially benefit the Russian government, which gets most of its energy revenue from taxes at extraction. Still, the decision has drawn criticism: the UK will not follow suit, EU leaders voiced disappointment, and German Chancellor Friedrich Merz and French President Emmanuel Macron publicly opposed the easing. European Economy Commissioner Valdis Dombrovskis warned that loosening sanctions would strengthen Russia’s ability to wage war. The Kremlin welcomed the move, with economic envoy Kirill Dmitriev saying further relaxation of restrictions on Russian energy looks increasingly inevitable amid an energy crisis.
Analysts say the timing is particularly advantageous for Russia. Isaac Levi of the Centre for Research on Energy and Clean Air noted the measure comes when Russian fossil-fuel exports were already under severe strain from prior sanctions. According to the International Energy Agency, Russia’s crude and refined product exports and revenues fell in February to their lowest levels since the full-scale invasion of Ukraine in 2022. Ben Hilgenstock of the Kyiv School of Economics said that, before the recent Iran-related disruptions, Russia’s fossil-fuel sector was hitting one of its weakest points since 2022: production and exports were dropping and buyers were hard to find.
The Iran crisis and ensuing market disruptions have already boosted Russia’s oil income. The Financial Times estimated an extra $150 million in revenue from increased sales tied to the crisis. Levi suggested a much larger upside, estimating Russia could earn an additional $5–10 billion a month because of the Iran war and the sanction relief, calling that a conservative estimate. Hilgenstock agreed that an extra $10 billion a month is realistic with oil near $100 a barrel, and warned revenues could rise further if prices climbed to $120–$150 per barrel.
Russia’s oil and gas revenues had been weakened by sanctions targeting its “shadow fleet” tankers and measures against major companies such as Lukoil and Rosneft, while buyers like India were beginning to scale back purchases. China, India and Turkey accounted for roughly 93% of Russian oil purchases since 2022, but India’s imports dropped 19% in February, part of a longer downward trend that had been encouraged by a US-India trade understanding reached in February.
The current waiver specifically covers barrels already loaded by March 12 and allows their sale until April 11. Because Russia continued producing at high volumes, many cargoes were already at sea and are now being offloaded in India and, under the expanded waiver, other Asian ports. The disruption in the Strait of Hormuz—through which about 89% of crude shipments pass to East and South Asia—has been a key driver of the current supply crunch.
Analysts caution that the waiver will not resolve the wider market imbalance. Hilgenstock noted that Russia is unlikely to substantially increase supply and that the shortfall caused by the Strait of Hormuz situation—potentially around 10 million barrels—won’t be fixed by allowing roughly 900,000 barrels a day of Russian oil sales. The relief mainly facilitates the sale of existing cargoes rather than replacing missing global supply.
There are concerns this step could presage further rollbacks of sanctions. Levi warned that removing restrictions on major Russian energy projects, such as Arctic LNG-2, could materially help Moscow restore gas export revenues. Hilgenstock said easing rules on oil already at sea was “low-hanging fruit” and suggested the next move could be lifting sanctions on Russian oil companies like Lukoil and Rosneft. He dismissed US claims that the measure would not significantly aid the Kremlin as disingenuous.
Edited by: Andreas Becker
