U.S. Treasury Secretary Scott Bessent announced that the United States is actually considering lifting sanctions on more Russian oil to combat a global supply crisis caused by the war with Iran.
While the U.S. had spent much of late 2025 tightening the noose on Russian crude, the functional closure of the Strait of Hormuz (where 20% of global oil flows) has forced the Trump administration to prioritize lower gas prices over isolating the Kremlin.
The “Un-sanctioning” Strategy
The Treasury Department is moving from a strategy of “maximum pressure” to one of “market relief.”
- Creating Supply: Secretary Bessent stated on Fox Business that there are “hundreds of millions of barrels of sanctioned crude on the water.” By “un-sanctioning” these tankers, the U.S. can effectively create an immediate global oil supply without waiting for new drilling.
- The 30-Day “Stranded” Waiver: As a first step, the U.S. issued General License 133, a 30-day window (ending April 4, 2026) specifically for India. It allows Indian refiners to buy Russian oil that was loaded on vessels before March 5 and was “stranded” at sea due to previous sanctions.
- No “New” Revenue: The Treasury argues this doesn’t help Putin’s war machine significantly because the oil was already produced and paid for; the waiver simply allows it to be offloaded to prevent a global price spike.
Why the Sudden Shift?
The “Operation Epic Fury” (the U.S.-Israel strikes on Iran) has sent shockwaves through the energy market that the U.S. can no longer ignore.
| Metric | Pre-Conflict (Feb 2026) | Current (March 7, 2026) |
| Brent Crude Price | $66 / barrel | $90+ / barrel |
| Hormuz Traffic | Normal | Nearly Halted |
| US Gas Average | $2.98 / gallon | $3.32 / gallon (and rising) |
- Domestic Pressure: With U.S. gas prices jumping 34 cents in a single week, the Trump administration is under intense pressure to stabilize the market before the 2026 midterm elections.
- India’s Role: India had previously agreed to stop buying Russian oil as part of a trade deal with the U.S. However, with 40% of its Middle Eastern supply cut off, the U.S. granted this reprieve to ensure its “essential partner” doesn’t face an energy collapse.
Political Fallout
The decision has sparked a fierce “war of words” in Washington:
- The White House View: Press Secretary Karoline Leavitt defended the move, stating the administration is “decimating” Iran’s military and must manage the economic side-effects responsibly.
- The Democratic Opposition: Senate Minority Leader Chuck Schumer slammed the move as a “free pass” for Putin, claiming the higher oil prices and eased sanctions are “lining Putin’s war coffers” for his invasion of Ukraine.
What This Means for the Price Cap
While the $60 G7 Price Cap technically remains in place, these new waivers and the talk of “un-sanctioning” suggest the cap is becoming secondary to the urgent need for “molecules in the market.” If the Iran conflict lasts beyond April, analysts expect the 30-day waiver for India to be extended or expanded to other nations.
