US waiver frees 20 million barrels of Russian oil amid Iran conflict

India, China likely to benefit as stranded Russian crude hits market. Representational Pic

The US waiver for buying seaborne Russian crude has immediately freed another 20-odd million barrels of oil on board ships which is expected to cool runaway prices that have crossed the USD100 per barrel mark in the global market amid the Iran war.

There are currently around 25 ships carrying Russian crude at sea while another five ships are carrying petroleum products. These can be diverted immediately to destinations from where the demand emanates.

The temporary waiver comes on top of the 30-day waiver earlier announced by the Trump administration for Indian refiners to buy Russian oil aimed at making more crude available in the market to bring down prices.

India and China have been the main buyers of Russian crude until now which has helped to control global prices as the two countries are among the largest importers of oil.

The Trump administration on Thursday issued a new license allowing countries to temporarily purchase certain Russian oil products.

"To increase the global reach of existing supply, @USTreasury is providing a temporary authorisation 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."

The license, posted to the US Treasury site, only applies to Russian crude or petroleum products loaded on vessels as of March 12. The license authorises those shipments till April 11.

The announcement also comes at a time when the new leader of Iran has announced plans to shut the Strait of Hormuz, through which 20 per cent of the world's oil exports transit.

The Iran war has now entered its second week with a continued escalation in missile and drawn attacks which have also targeted oil infrastructure in the Middle East countries and commercial ships operating in the region.

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