The United States has temporarily loosened sanctions on Russian oil to help calm global energy markets during the fallout from the Israel–Iran confrontation — a move that also offers a timely economic boost to Moscow. Treasury Secretary Scott Bessent announced on social media that the administration is expanding a recent, limited waiver that had allowed Russian cargoes destined for India to be accepted. The expansion permits sales of Russian oil already at sea to countries beyond India.
Bessent framed the step as temporary and narrowly targeted, saying it applies only to barrels already in transit and will not materially benefit the Russian government, which receives most energy revenue through extraction taxes. The policy is limited to cargoes loaded by March 12 and permits their sale until April 11.
The decision provoked criticism from European leaders. The UK said it would not follow the US, and senior EU figures expressed disappointment. German Chancellor Friedrich Merz and French President Emmanuel Macron publicly opposed the move, and European Economy Commissioner Valdis Dombrovskis warned that loosening sanctions would strengthen Russia’s capacity to wage war. The Kremlin welcomed the change: economic envoy Kirill Dmitriev suggested further easing of restrictions on Russian energy was becoming more likely amid the energy shock.
Analysts say the timing is particularly advantageous for Russia. Isaac Levi of the Centre for Research on Energy and Clean Air noted the relaxation comes at a moment when Russian fossil-fuel exports were already under pressure from previous sanctions. The International Energy Agency reported that Russian crude and refined-product exports and revenues fell in February to their lowest levels since the 2022 full-scale invasion of Ukraine. Ben Hilgenstock of the Kyiv School of Economics said Russia’s fossil-fuel sector had been at one of its weakest points since 2022: production and exports were sliding and buyers were harder to find.
The Iran-related crisis and resulting market disruptions have already lifted Russian oil income. The Financial Times estimated an extra $150 million in revenue tied to higher sales during the crisis; Levi offered a much larger estimate, suggesting Russia could pick up an additional $5–10 billion a month because of the Iran war and the sanction relief, calling that conservative. Hilgenstock said an extra $10 billion a month is realistic with oil near $100 a barrel and warned revenues could grow further if prices climbed to $120–$150 a barrel.
Sanctions aimed at Russia’s so-called “shadow fleet” of tankers and measures targeting large companies such as Lukoil and Rosneft had weakened Moscow’s oil and gas revenues. Since 2022 China, India and Turkey have purchased about 93% of Russia’s oil, but India’s imports fell 19% in February, part of a longer decline that followed a US–India trade understanding reached in February.
Because Russia continued to produce at high volumes, many cargoes were already en route when the waiver was announced; those shipments are now being unloaded in India and, under the expanded waiver, other Asian ports. The disruption in the Strait of Hormuz — a channel through which a large share of crude bound for East and South Asia transits — has been a key driver of the current supply crunch.
Analysts caution the waiver will not resolve the broader market imbalance. Hilgenstock noted Russia is unlikely to substantially increase supply and that the shortfall caused by disruptions around the Strait of Hormuz — potentially millions of barrels — cannot be fixed merely by enabling the sale of roughly 900,000 barrels a day of Russian oil. The measure mainly facilitates moving existing cargoes rather than replacing missing global supply.
There are also concerns the step could presage further rollback of sanctions. Levi warned that lifting restrictions on major energy projects such as Arctic LNG-2 could materially help Moscow restore gas export revenues. Hilgenstock called the easing for cargoes already at sea “low-hanging fruit” and suggested the next step might be relaxing rules on major Russian oil companies, a move he said would have a far greater impact than the administration’s public assurances that the change is limited.
Edited by Andreas Becker