Oil prices traded near their highest level since 2022 Friday, shrugging off the Trump administration’s earlier decision to temporarily allow the delivery and sale of sanctioned seaborne Russian crude – a waiver aimed at mitigating a surge in prices following its attacks on Iran.

The license, posted to the US Treasury website, applies only to Russian crude and petroleum products loaded on vessels as of March 12 and authorizes those shipments through April 11.

“To increase the global reach of existing supply, @USTreasury is providing a temporary authorization to permit countries to purchase Russian oil currently stranded at sea,” Treasury Secretary Scott Bessent wrote on social media. “This narrowly tailored, short-term measure applies only to oil already in transit and will not provide significant financial benefit to the Russian government, which derives the majority of its energy revenue from taxes assessed at the point of extraction.”

Brent crude, the global oil benchmark, fell 1.3% to just over $99 a barrel. On Thursday, it settled at $100.46 – the highest settlement level since 2022, when oil prices spiked following Russia’s full-scale invasion of Ukraine.

WTI, the US benchmark, dropped 2% Friday to trade at $93.70 a barrel.

Crude oil prices have surged since the effective closure of the Strait of Hormuz, which is flanked by Iran and is ordinarily the conduit for one-fifth of the world’s oil output.

Mohit Kumar, an economist at Jefferies, an investment bank, noted that Russia produces around 10 million barrels of oil per day, while the blockage of the strait reduces oil flow by 13-14 million barrels, “without accounting for the closure of oil and gas facilities in the region.”

“However, Russia was already exporting to Asian countries,” he wrote in a note, concluding that “it is not obvious” to what extent the easing of US sanctions will improve global oil supply.

The US decision to temporarily lift sanctions on oil from Russia, a major exporter, comes despite previous pressure on Russian oil companies as part of a bid to stem the flow of cash funding Moscow’s war in Ukraine.

Global oil supply continues to be under threat. Iran has warned it will set the Middle East’s oil and natural gas “on fire” in retaliation for any attacks on its own energy infrastructure.

According to CNN’s reporting, US national security officials significantly underestimated Iran’s willingness to close the Strait of Hormuz and the resulting risk of a global energy crisis. Now the United States is rushing to contain the economic fallout.

At least 16 oil tankers, cargo ships and other vessels have been attacked in and around the Strait of Hormuz, the Arabian Gulf and the Gulf of Oman in the past two weeks, according to the UKMTO, which monitors maritime traffic. Iran has reportedly been laying mines in the strait, and the US military said it had sunk 16 minelayers in the area earlier this week.

Nonetheless, in an interview with Fox News, US President Donald Trump suggested oil tanker crews in the Strait of Hormuz should simply “show some guts” and insisted “there’s nothing to be afraid of.”

Putin ‘windfall’

Democratic Sen. Jeanne Shaheen of New Hampshire and ranking member on the Senate Committee on Foreign Relations criticized the latest US decision on Russian oil on social media.

“As Putin helps Iran target Americans in the Middle East, @POTUS is now filling the Kremlin’s war coffers. Instead of squeezing Russia’s faltering economy, the President’s ill-planned war is giving Putin a windfall while American families face higher prices,” Shaheen wrote.

CNN previously reported that the United States had granted Indian refiners a 30-day waiver to buy Russian oil currently stranded at sea. Bessent, at the time, said the move was “to enable oil to keep flowing into the global market.”

As the historic disruption to energy supply persists, countries have scrambled to stem the economic impact by curbing consumption, capping fuel prices and tapping into emergency oil reserves. Analysts, economists and traders have warned that even a rapid end to the war won’t necessarily mean a quick re-opening of the Strait of Hormuz.

On Friday, Goldman Sachs revised its price forecast 20% higher for Brent crude oil this year, expecting $100 a barrel in March and $85 a barrel in April, assuming a three-week disruption to the Strait of Hormuz.

However, if the closure extends to two months, that will push its end-of-year forecast from $71 a barrel to $93 a barrel. (CNN)

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