Trump admin allows other countries to buy Russian oil — but there's a catch
As global oil prices surge due to the United States’s actions in Iran, America has no choice but to allow other countries to purchase Russian oil. India was the first to be granted a 30-day waiver to purchase Russian crude after the country’s oil and gas needs were severely hampered. Now, the US has allowed other countries to purchase Russian crude as well, but there is a catch.
The catch is that this waiver only applies to oil at sea. According to a report in CNBC, there are roughly 124 million barrels of Russia-origin oil at sea across 30 locations globally as of March 12. However, there are several questions over how much this move would actually help other countries, and whether it will do much to bring down oil and gas prices.
As per a report in Bloomberg, a third of the Russian oil at sea is en route to China. The two countries share a strong diplomatic relationship and will undoubtedly come to each other’s aid in uncertain times. Apart from that, around 30 to 40 million barrels will be bought by India. The oil from the Mediterranean and the Atlantic Ocean won't be enough to satisfy the energy demands of a lot of countries.
“Of course, any supply helps, but this is a smaller help than it looks,” said Robert Rennie, head of commodity research at Westpac Banking Corp. “We are only really talking about replacing maybe four or five days of lost Gulf exports. Sure, it helps, but it is no panacea,” he added. The US is not thrilled about the Russians making significant money thanks to their oil, but Treasury Secretary Scott Bessent has assured that this was a temporary measure.
“The temporary increase in oil prices is a short-term and temporary disruption that will result in a massive benefit to our nation and economy in the long-term,” he said. Speaking further about waivers issued to purchase Russian oil, the Treasury Secretary acknowledged that it was unfortunate, but hoped that it would only be the case for a short period of time.
The war has already stretched quite long despite unrelenting attacks from both the US and Israel. After all, Iran is a much stronger nation than Venezuela and clearly has the means to defend itself. If it ramps up its attacks on ships passing through the Strait of Hormuz, the US will come under increasing pressure to lift sanctions on Russian oil. “If oil prices spike again, perhaps because Iran steps up its attacks on oil tankers in the Strait of Hormuz, pressure to lift Russia sanctions will build further,” Robin Brooks, a senior fellow at the Brookings Institution, said.
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