Rising Oil Prices: Top Reasons the US Unlocked Russian Oil

Washington has temporarily lifted sanctions on Russian oil stored at sea, and did so not because of Moscow, but because of Tehran.

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued General License No. 134, authorizing the sale, delivery and unloading of Russian oil and petroleum products that had already been loaded onto vessels before March 12, 2026. The license remains valid until April 11.

The measure applies only to oil already in transit and does not authorize new production or exports.

Hormuz crisis forces a tactical shift

The broader context behind the decision lies in the escalating crisis in the Middle East. Following U.S., Israeli strikes on Iran, Tehran closed the Strait of Hormuz, the strategic waterway through which a significant share of global oil supply passes.

Energy markets reacted immediately. Oil prices quickly surged above $100 per barrel, raising fears of a rapid supply shock.

Against this backdrop, Treasury Secretary Scott Bessent wrote on the social media platform X that the license is a “narrowly targeted, short term measure.” According to him, it applies only to cargoes already in transit and is unlikely to generate significant additional revenue for Russia.

Most of Moscow’s energy income, he noted, comes from production taxes rather than individual export transactions.

According to shipping analytics cited by CNBC, more than 120 million barrels of Russian oil were floating in global waters at the time of the decision, stored across roughly 30 tanker storage units.

That volume represents roughly five to six days of global oil consumption. Allowing these cargoes to reach buyers could quickly add supply to the market without requiring new production.

Moscow interprets the move as recognition

The Kremlin interpreted the decision as a sign in its favor.

Kirill Dmitriev, the Russian president’s special representative for investment and economic cooperation, wrote on Telegram that the move effectively acknowledges a reality long argued by Moscow, that the global oil market cannot remain stable without Russian supply.

According to him, further easing of restrictions on Russian energy exports may eventually become unavoidable despite resistance from some European governments.

Dmitriev also responded sharply to criticism from Berlin, writing on X that the policies of German Chancellor Friedrich Merz pose a major threat to Germany’s economy.

A visible crack inside the G7

Europe’s reaction exposed deeper divisions within the Western coalition.

Merz said that six of the seven G7 leaders, during a video conference with U.S. President Donald Trump, opposed easing sanctions on Russian energy. According to the German leader, all six learned about the American decision only after it had already been made.

In his view, the current problem in global oil markets is price volatility rather than physical supply, meaning that releasing Russian oil may not solve the core issue.

The United Kingdom has taken a similar, though more cautious, position. A Downing Street spokesperson emphasized that London “maintains maximum economic pressure” on Moscow and does not intend to revise its own sanctions regime.

The risk of a much bigger oil shock

Whether the newly unlocked cargoes will be enough to stabilize markets remains uncertain.

Former IMF chief economist Olivier Blanchard warned on March 12 that the combination of the Hormuz blockade, shipping threats and declining global reserves could drive oil prices to $150 to $200 per barrel.

Analysts at JPMorgan outlined an even harsher scenario in a recent market review. If the conflict escalates further, they estimate that the global supply deficit could reach 16 million barrels per day.

In that context, the 120 million barrels currently floating at sea represent only a short term buffer, not a structural solution.

The OFAC license addresses a logistical bottleneck, tankers stuck offshore, but it does not resolve the deeper problem created by the closure of the Strait of Hormuz.

For Washington, the decision appears to be a tactical maneuver within a broader confrontation with Iran.

At the same time, it sets an important precedent. Sanctions on Russian energy, long presented as a rigid long term containment strategy, are proving to be a flexible instrument that the United States is willing to adjust when global energy stability is at stake.