The Brief

The U.S. Treasury Department issued a general license on March 12 allowing countries worldwide to purchase roughly 128 million barrels of Russian oil already loaded on sanctioned tankers, with the authorisation valid until April 11. The move — an escalation from an India-only waiver issued just one week earlier — drew immediate condemnation from European allies and Ukraine, while Moscow called it vindication of Russia’s energy indispensability. Brent crude remained above $100 per barrel despite the announcement, up from approximately $72 before the Iran war began on February 28.

The Report

The Treasury Department’s General License 134, issued late Thursday, temporarily suspends the U.S. oil price cap on Russian crude and petroleum products already loaded on vessels as of March 12. Treasury Secretary Scott Bessent described it as a “narrowly tailored, short-term measure” that would “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 licence permits sales to any country — a significant broadening from GL 133, the India-specific waiver issued on March 5 that covered oil loaded on sanctioned shadow fleet vessels produced by entities including Rosneft and Lukoil.

The licence arrives amid the most severe energy supply disruption since the 1970s. Iran’s near-total closure of the Strait of Hormuz since the U.S.-Israel military campaign began on February 28 has reduced daily transits from 138 ships to roughly five, creating a global shortfall estimated at 15 to 20 million barrels per day. Brent crude peaked at $126 per barrel before settling around $101 on Thursday morning. The IEA announced a record 400 million barrel emergency release from strategic reserves on March 11 — more than double the previous record of 182 million barrels released after Russia’s 2022 invasion of Ukraine — though analysts noted the measure would cover the shortfall for only about 20 days.

European leaders responded with unusual coordination. German Chancellor Friedrich Merz said the decision was “wrong,” arguing “there is currently a price problem, but not a supply problem.” French President Emmanuel Macron, speaking alongside Ukrainian President Volodymyr Zelenskyy in Paris, vowed to maintain European sanctions and declared that “in no case should an increase in the price of oil lead us to change our position with regard to Russia.” European Council President Antonio Costa called the move “very concerning, as it impacts European security.” The EU and UK price caps on Russian oil remain in force, creating a split in Western enforcement.

Zelenskyy warned that the waiver could provide Russia approximately $10 billion for its war effort. “It spends the money from energy sales on weapons, and all of this is then being used against us,” he said. The criticism carried additional weight following reports on March 6 that Russia has been providing Iran with satellite imagery and targeting data on the locations and movements of American troops, ships, and aircraft since the war began — intelligence sharing described by one official as a “pretty comprehensive effort.”

In Washington, Senate Minority Leader Chuck Schumer and eleven Democrats accused the President of “handing Putin, his shadow fleet, and traders still dealing in sanctioned oil a free pass.” Senator Brian Schatz offered a sharper summary: “Looks like we fought Iran and Russia won.” Republican Representative Don Bacon called the administration’s posture toward Moscow “moral blindness.” Russia’s special envoy Kirill Dmitriev, meanwhile, posted a Russian flag on social media with the message “Buy Russian oil and gas to maintain a balanced energy supply.”

Oil prices remained above $100 per barrel after the announcement.

The Angle

The administration’s framing depends on a specific claim: that this is a supply-side intervention with negligible benefit to Russia. Bessent’s argument — that Russian revenue comes from extraction-point taxes, not sales — is technically interesting and practically irrelevant. Zelenskyy’s $10 billion estimate and Bessent’s “not significant” assessment cannot both be true, and the market appears to have noticed. Prices did not move.

What the framing obscures is the sequence. One week separated the India-only waiver from the global one. Bessent signalled the escalation publicly on March 6 — the same day intelligence reports confirmed Russia was feeding Iran satellite targeting data on American forces. The administration has not reconciled these two facts, and neither has the coverage. A country actively providing an adversary with the means to locate and kill American servicemembers received sanctions relief seven days later, and the stated reason was fuel prices. The diplomatic term for this is incoherence. The structural term is that the price of oil has become more politically expensive than the price of consistency.

Merz’s claim that this is “a price problem, not a supply problem” is the more revealing line. If he is right — and the IEA’s characterisation of “the largest supply disruption in history” suggests he is not entirely right — then the waiver solves nothing. If he is wrong, the waiver provides approximately twenty days of partial relief before the April 11 expiration forces the same decision again, at which point the administration will have established the precedent that Russian sanctions are negotiable when American consumers feel the cost. Moscow understood this before the licence was issued. Dmitriev’s flag post was not triumphalism. It was a price list.