President Donald Trump has handed an embarrassing victory to Vladimir Putin amid his self-inflicted economic crisis.
The price of crude oil has spiraled since Trump, 79, launched “Operation Epic Fury” against Iran on Feb. 28. In response, Tehran has choked the world’s energy supply, using drones and mines to strike tankers in the Strait of Hormuz, the narrow shipping lane that connects Gulf oil to the rest of the world.
So, in an attempt to quell market tumult and ease prices, the Trump administration has announced that it will allow Russia to begin selling previously sanctioned oil stuck on tankers at sea, through April 11.
The commodities data tracking service Kpler states that this amounts to some 130 million barrels, which could net the Kremlin billions of dollars.
Oil prices spiked to nearly $120 per barrel this week, their highest level since the pandemic. At the opening of the Asian markets on Friday, the price stayed above $100 per barrel, despite Trump bending the knee to the Kremlin dictator.
The Financial Times reported Thursday that Russia was already the biggest winner from Trump’s war, raking in as much as $150 million per day in extra budget revenues from oil sales.
But Treasury Secretary Scott Bessent, after announcing the move to release the sanctioned oil, said it “will not provide significant financial benefit to the Russian government.”
He was more candid in a podcast interview on Thursday, saying that it was “unfortunate” that Russia stood to gain financially from Trump’s war. He said he hopes this amounts to only a “micro period.”
The Russians, though, are taking a victory lap. Moscow boasted on Friday, saying that it’s clear the global energy market “cannot remain stable” without its oil.
Russia’s economic envoy Kirill Dmitriev even asserted that it was “increasingly inevitable” that Washington would lift more sanctions.
“The United States is effectively acknowledging the obvious: without Russian oil, the global energy market cannot remain stable,” Dmitriev posted on Telegram.
“Amid the growing energy crisis, further easing of restrictions on Russian energy sources appears increasingly inevitable, despite resistance from some in the Brussels bureaucracy,” he added.
Some G7 leaders are annoyed that Trump has eased sanctions, put in place as punishment for Putin’s invasion of Ukraine in 2022.
French President Emmanuel Macron said that the Strait of Hormuz shutdown “in no way” justified the move. “The consensus was that we should not change our position on Russia and should maintain our efforts on Ukraine,” Macron said after a call with other leaders.
The move marks a U-turn from the summer when the Trump administration doubled tariffs on India as punishment for buying oil from Russia.
“In one fell swoop, we’ve undone a huge amount of pressure on Russia,” Edward Fishman, a senior fellow and director of the Maurice R. Greenberg Center for Geoeconomic Studies at the Council on Foreign Relations, told The New York Times.
In an attempt to ease energy anxiety, Trump posted on Truth Social, essentially telling Americans to suck up the fallout. “The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,” Trump declared. “BUT, of far greater interest and importance to me, as President, is stoping [sic] an evil Empire, Iran, from having Nuclear Weapons, and destroying the Middle East and, indeed, the World. I won’t ever let that happen!”
Bessent was more circumspect in an interview with British broadcaster Sky News on Thursday. He said the U.S. Navy will escort ships through the Strait of Hormuz, “perhaps with an international coalition,” as “soon as it is militarily possible.”
Energy Secretary Chris Wright echoed Bessent during an interview with CNBC, also on Thursday. It comes after he moved markets earlier this week by posting about the apparent successful passage of ships through the strait. However, this was untrue, and he quickly deleted the post, forcing an embarrassing walk-back from the administration. The episode left markets confused.
Iran has been peppering the strait with drones, attacking ships from all over the world. Reports suggest it has also laid mines. However, on Thursday, Wright said that the U.S. aims to guide tankers through the passage by the end of the month.
However, ClearView, an independent research firm based in Washington, D.C., said, “Iranian officials show little sign of relenting.”
The Trump administration will also try to address the issue by releasing 172 million barrels of oil from its Strategic Petroleum Reserves starting next week, the Energy Department announced Wednesday night.
The White House has been contacted for comment.
