Trump authorizes the purchase of Russian oil amid soaring hydrocarbon prices

Barcelona / BrusselsVladimir Putin appears to be, for the moment, one of the biggest beneficiaries of the US and Israeli war against Iran. The US Treasury Department has announced that it will temporarily authorize the purchase of Russian oil currently in transit. In other words, Washington has issued a 30-day exemption from the sanctions that prevented the purchase of Russian hydrocarbons as punishment for the war in Ukraine. The measure aims to curb the surge in crude oil prices, which jumped more than 9% on Thursday after several days of increases. US Treasury Secretary Scott Bessent argued that allowing the tankers currently stuck at sea, unable to transport their crude, to move will help stabilize global energy markets. In a statement to X published hours after benchmark oil prices surpassed $100 per barrel, Bessent said the measure was "very tight" and "short-term" and would not provide a significant financial benefit to the Russian government.

But the fact is that it will provide some relief for the Russian economy, which is suffering the consequences of more than four years of war against Ukraine. Ukrainian President Volodymyr Zelenskyy considered it a "wrong" decision that "does not help peace."

How much oil is being released?

With the lifting of these sanctions on Russian crude, thousands of barrels will enter the market, which should contribute to a decrease—or at least a moderation of the escalating price—of oil. Kirill Dmitriev, the Kremlin's special envoy and chief negotiator with the US, has said that the measure will affect about 100 million barrels. This would be equivalent to almost a day of global production, according to calculations by Reuters.

According to Zelensky, the sale of the crude transported by Russian tankers will generate an additional $10 billion, which Moscow will use to continue financing the aggression against his country. "Russia spends that money on weapons, on drones to massively attack Ukrainians, and as we already see in intelligence reports, these same drones are also being used against Iran's neighbors," he lamented at a press conference alongside Emmanuel Macron in Paris.

How does Russia benefit?

Since the imposition of these restrictions against major Russian oil companies in late November,The country's revenues from the sale of hydrocarbons had been plummeting.Now, the measure announced this Friday provides a lifeline for the Kremlin, which relies heavily on energy exports to finance the war against Ukraine. Russia's revenue from energy sales has halved in the first two months of the year, and the government had already considered significant budget cuts to address the situation.

Bessent's announcement is the second move in just a few days by the United States to ease restrictions on Russian exports. Last Thursday, Washington authorized India to purchase Russian oil, following Trump's August decision. will increase tariffs on the Asian countryPrecisely as punishment for having purchased crude oil from Moscow. According to Bloomberg, by Wednesday New Delhi had already bought some 30 million barrels of Russian crude that had been stored on ships for weeks.

The option of lifting the oil restrictions already surfaced after a call this Monday between Donald Trump and Vladimir Putin. Shortly afterward, Dmitriev traveled to the United States to discuss the energy crisis with a White House delegation that included his two usual interlocutors, special envoy Steve Witkoff and Trump's son-in-law, Jared Kushner.

The Kremlin is already using this to boast and argue that Russian oil is key to mitigating the impact of the Iran-Contra affair. "In the context of the growing energy crisis, a further relaxation of restrictions on Russian energy supplies seems increasingly inevitable, despite the resistance of some Brussels bureaucrats," he wrote in a message on Telegram.

The decision may minimally help improve the situation in crude oil trading and increase global oil supply, but at the same time, it could further complicate Washington's relations with its European allies, who have already expressed disagreement.

What does Europe say?

Indeed, several European leaders have criticized Washington's measure. For the European Union, economic sanctions are key to pressuring Russia and forcing it to the negotiating table for a possible peace agreement. European Commission President Ursula von der Leyen repeatedly expressed her opposition to lifting restrictions against Moscow, and European Council President António Costa directly criticized the Trump administration's decision, calling it "unilateral" and "very worrying" for "European security." "Increasing economic pressure on Russia is crucial for it to accept serious negotiations for a just and lasting peace," Costa tweeted on Friday. German Chancellor Friedrich Merz called it a "mistake." "Right now there is a problem with prices, but not with supply. And in this regard, I would like to know what other factors led the US government to make this decision," he added. French President Emmanuel Macron also criticized the measure. Speaking to his Ukrainian counterpart, Macron attempted to calm tensions by assuring that the easing of sanctions against the Kremlin is "limited" and temporary, but affirmed that the G7's position (the seven largest economies in the world) is that "the current situation in no way justifies lifting these sanctions." The European Union agreed to prohibit the purchase, import, and transfer of Russian oil shortly after the start of the war, in June 2022. The ban came into effect in December of the same year, but an exemption was applied to pipelines supplying this fossil fuel to some EU member states. In fact, one of the demands of the Slovak and Hungarian governments for ceasing to block a new package of European sanctions against Vladimir Putin's regime and the disbursement of a €90 billion loan to Ukraine is the repair of the pipeline. This infrastructure, destroyed by the Russian army, is key to Russia's oil supply to its allies within the European bloc, especially Hungary and Slovakia.