WASHINGTON — The U.S. government scrambled to contain surging oil prices after Iran's Supreme Leader Mojtaba Khamenei reaffirmed his commitment to blocking the Strait of Hormuz in his first public address.
The Treasury Department's Office of Foreign Assets Control (OFAC) issued a license on March 12 permitting foreign sales of Russian crude oil and petroleum products loaded on vessels before 12:01 a.m. that day, valid through April 11.
Treasury Secretary Scott Bessent announced on X: "We have issued a temporary license to purchase stranded Russian crude oil to expand access to existing supply chains."
Industry analysts estimate the volume at approximately 9.5 million barrels, with India and China expected to be the primary buyers.
President Donald Trump had expressed confidence that "oil prices will fall soon," but prices surged further after Khamenei's hardline statement. Brent crude futures closed at $100.46 per barrel — the first time Brent exceeded $100 since August 2022. West Texas Intermediate (WTI) rose 9.7% to $95.73.
The move to ease sanctions on Russia came after the administration's record Strategic Petroleum Reserve release failed to stabilize markets.
Russia is already reaping substantial gains from the Iran conflict. The Financial Times reported that increased Chinese and Indian demand for Russian crude could generate an additional $3.3 billion to $4.9 billion in revenue for Moscow through late March — up to $150 million daily.
Iran has indicated it would allow Indian vessels through the Strait of Hormuz on condition that India severs ties with the United States, adding pressure on Washington.
White House Press Secretary Carolyn Leavitt said the administration is also considering temporarily waiving the Jones Act to reduce oil transportation costs. The 1920 law requires goods shipped between U.S. ports to be carried on American-built, American-flagged vessels. The requirement has led U.S. companies to import foreign oil rather than transport domestic crude on expensive American ships.
The potential suspension of the century-old legislation underscores the administration's urgency in addressing the energy crisis.
