The United States has temporarily eased sanctions on Russian petroleum exports in an effort to calm surging global energy prices driven by the war involving the United States, Israel and Iran.
Washington issued a 30 day waiver allowing countries to purchase Russian oil and petroleum products that are currently stranded at sea. The move is intended to ease supply pressures and stabilise markets as the conflict approaches its third week.
However, the measure has so far had limited impact. Benchmark Brent crude climbed back to around 101 dollars a barrel on Friday as global markets continued to react to the escalating conflict.
Oil markets under pressure
Energy prices have surged since the war began on February 28, raising fears of one of the most serious disruptions to global oil supplies in decades.
Oil prices jumped about nine percent to around 100 dollars a barrel earlier this week and are now nearly 40 percent higher than before the conflict started.
Much of the concern centres on the Strait of Hormuz, through which roughly one fifth of the world’s oil normally passes.
Iran has launched attacks on vessels in the area during the conflict, raising the risk that shipping through the narrow waterway could be severely disrupted.
The International Energy Agency warned that the war is creating what could become the largest oil supply disruption in history.
Washington’s response
The waiver issued by Washington allows buyers to complete transactions involving Russian petroleum that is already being transported at sea, where cargoes are often resold or redirected to different buyers.
U.S. Treasury Secretary Scott Bessent said the rise in oil prices should be viewed as a temporary disruption that could ultimately benefit the U.S. economy.
The United States remains the world’s largest oil producer, a point repeatedly emphasised by Donald Trump.
Trump has argued that higher global oil prices could boost revenues for American energy producers even as the administration attempts to stabilise markets.
War intensifies
While policymakers focus on energy markets, the conflict itself continues to escalate.
Iran fired another barrage of missiles and drones at Israel on Friday, while Israeli forces said they had struck more than 200 targets across Iran, including missile launchers and weapons production facilities.
The Israel Defense Forces reported strikes in western and central Iran as well as attacks against the Iran allied group Hezbollah in Lebanon, including operations in Beirut.
Explosions were reported in the Iranian capital Tehran and nearby Karaj, according to Iranian media.
The war has killed more than 2,000 people and expanded into a wider regional conflict.
Rising political tensions
Leaders on all sides have continued issuing threats.
Iran’s new supreme leader Mojtaba Khamenei vowed that Tehran would keep the Strait of Hormuz closed and warned neighbouring countries hosting U.S. bases that they risk becoming targets.
Israeli Prime Minister Benjamin Netanyahu suggested Israel was working to create conditions that could lead to the collapse of Iran’s leadership.
Trump has meanwhile said the United States was “totally destroying” Iran’s government and repeated claims that the war could generate economic benefits for the United States through higher oil prices.
Regional spillover
The fighting has also spilled into neighbouring countries.
In Iraq, the U.S. Central Command said one of its refuelling aircraft crashed in western Iraq during an incident involving another aircraft, killing four of the six crew members.
The Iran aligned group Islamic Resistance in Iraq claimed responsibility for bringing down the aircraft.
Meanwhile, Emmanuel Macron said a French soldier had been killed and several others wounded in an attack in northern Iraq, where foreign forces are training local troops against militants linked to the Islamic State.
Analysis
The decision by Washington to temporarily relax restrictions on Russian oil highlights how the war is reshaping global energy policy.
Just a few years ago, Western governments were attempting to reduce dependence on Russian energy after the Russian invasion of Ukraine. Now, the need to stabilise global markets is pushing policymakers to allow limited flows of sanctioned oil.
The move underscores the scale of the disruption caused by the conflict with Iran. If the Strait of Hormuz remains threatened or closed, global oil supplies could tighten dramatically.
At the same time, the political messaging from Washington suggests the United States sees strategic and economic advantages in high energy prices, even as it attempts to prevent markets from spiralling out of control.
The result is a complex balancing act between managing the global economic fallout of the war and pursuing broader geopolitical objectives in the Middle East.
With information from Reuters.
