On July 3, 2002, the Russian supertanker Astro Lupus waits to offload its first direct shipment of Russian crude oil in the Gulf of Mexico.
Pool | AFP | Getty Images
The United States on Thursday temporarily approved the purchase of Russian crude oil stranded at sea in a bid to stabilize energy markets.
U.S. Treasury Secretary Scott Bessent said in a post on X that this is a “narrowly tailored short-term measure” that applies only to oil already in transit.
CNBC understands that as of March 12, approximately 124 million barrels of Russian crude oil existed at sea in 30 locations around the world, equivalent to approximately five to six days’ worth of supply.
“While a temporary increase in oil prices is a short-term, temporary disruption, it will have significant long-term benefits for our country and our economy,” Bessent said.
Oil prices have fluctuated rapidly since the start of the Iran war, with crude oil prices on Monday close to $120 per barrel.
Global benchmark Brent crude oil closed at just over $100 a barrel on Thursday after Iran’s new supreme leader Mojtaba Khamenei vowed to keep the Strait of Hormuz closed.
Bessent noted that the interim measures do not bring “significant economic benefits to the Russian government.”
The Treasury Secretary said this is because Moscow derives most of its energy revenue from taxes that are assessed at the point of extraction.
The exemption applies to Russian crude oil products that are loaded onto ships by 12:01 a.m. ET, and purchases are allowed until 12:01 a.m. on April 11, according to a notice posted on the Treasury Department’s website.
Indian exemption
The move comes after the U.S. government last Thursday granted India a 30-day exemption to buy Russian oil. Bessent also said the move would not bring significant economic benefits to the Russian government, as it “only authorizes transactions involving oil that is already stranded at sea.”
In a podcast interview published Friday, Bessent said it would be “unfortunate” that Russia would benefit economically from the move, but “I hope it’s only for a micro period.”
He explained that the exemption was given because “Russian barrels are offshore and are a quick source of supply for Indian refineries.”
The G7 and European Union currently impose sanctions on Russian oil over the 2022 invasion of Ukraine, imposing a price cap on Russian oil of $44.1 per barrel.
The EU also pledged to phase out remaining oil imports from Russia by the end of 2027.
In 2022, then-U.S. President Joe Biden had banned imports of Russian oil, liquefied natural gas, and coal into the United States.
