US allows all countries to buy Russian oil:30-day exemption; Iran had warned crude oil could reach $200

Due to the ongoing war between America-Israel and Iran, crude oil prices worldwide have crossed $100. To control this, the Trump administration has given temporary approval to other countries to buy oil from Russia. Several Russian oil tankers are stranded at sea. Earlier, the US had talked about easing sanctions for India to buy crude oil from Russia. However, Indian officials have stated that India is not dependent on any country’s permission to buy oil. Approval to buy oil only from ships stranded at sea The US Treasury Department (Ministry of Finance) issued a license on Thursday. Under this, Russian crude oil and petroleum products that had been loaded onto ships before 12:01 AM on March 12 can be delivered and sold. This exemption has been granted only until April 11. US Treasury Secretary Scott Bassant stated that its purpose is to increase oil supply worldwide to curb rising prices. US Says – Russia Will Not Benefit Much US Treasury Secretary Scott Bessent wrote on social media platform X that President Trump wants to bring stability to the global energy market. He said that this is a short-term decision and it will not bring any significant economic benefit to Russia. According to Bessent, a large part of Russia’s earnings comes from taxes levied at the time of oil extraction, whereas this exemption is only for oil that is already in transit. Why did America change its mind? 3 main reasons 1. Supply halted from Hormuz route: Due to the war between Iran and America-Israel, supply has been halted in the ‘Strait of Hormuz’, the world’s most important oil route. About 20% of the world’s oil passes through here. Countries like India import about half of their oil needs through this route. 2. Crude oil could reach $200: In the last few days, Brent crude prices had reached close to $120 per barrel. Iran has warned that prices could reach $200. In such a situation, the entry of Russian oil into the market will increase supply, leading to a fall in prices. US banned Russian oil in 2022 When Russia attacked Ukraine in February 2022, Western countries believed that Russia was getting money for the war by selling oil and gas. To stop this ‘funding’, America and Europe began imposing restrictions on buying oil from Russia. Crude oil crosses $101 per barrel After recent attacks on energy supply and infrastructure in the Middle East, crude oil prices have again risen by more than 9%. With this surge, oil prices have once again crossed $100 per barrel. Even the decision to withdraw a record amount of oil from strategic reserves (emergency stock) to keep markets normal has been overshadowed by fears of supply disruption. Hormuz is a 167 km long waterway This is a waterway about 167 km long, connecting the Persian Gulf to the Arabian Sea. Due to the threat, no oil tankers are passing through there. Countries like Saudi Arabia, Iraq, and Kuwait also depend on it for their exports. India imports 50% of its crude oil and 54% of its LNG through this route. Iran itself exports through this route.