US Lifts Sanctions on Iranian and Russian Oil Amid Soaring Gas Prices

The United States confirmed yesterday that they would temporarily lift sanctions on Iranian and Russian oil at sea for the next 30 days, helping settle soaring gas prices across the globe.

Despite the ongoing war, the US Department of the Treasury decided yesterday that the rise in prices across the world had crossed a threshold that required immediate action.

Earlier in the week, the International Energy Agency (IEA) announced the release of more than 400 million barrels of oil from international emergency energy stockpiles. However, the move did little to cool soaring prices amid a major blockage in the Strait of Hormuz, which handles more than 20% of the world's oil traffic.

Then, after Israeli strikes took place yesterday on Iranian oil and gas fields, Iran retaliated with strikes on energy infrastructure across multiple Gulf countries.

Following the attacks, Qatar's Ras Laffan natural gas facility announced that the missiles had done significant damage, wiping out at least 17% of their liquefied natural gas processing capacity (LNG). They also claimed that it would take up to five years to restore the damage– another sign that this war is sure to have lasting impacts on the US, Israel, the Gulf, and the world.

The strikes also sent oil prices soaring, with Brent crude reaching as high as $115 a barrel before prices settled just above $100. AAA's gas price index of the US continued to rise alongside the prices of crude, with the average gas prices across the US rising to $3.91 per gallon. By comparison, those same prices were $2.93 just one month ago. Diesel has soared even further, jumping from $3.69 in February to an average of $5.16 per gallon.

To attempt to settle the ongoing spike in prices, the Treasury Department confirmed yesterday that they will be lifting sanctions on any Iranian oil that is already at sea. The sanctions will be lifted for one month, extending until April 19, but in the meantime, Iranian oil tankers will be able to deliver oil to nations that need it. The department projects the move to bring more than 140 million extra barrels of crude oil to the world, helping manage the gas crisis.

The US does not purchase Iranian oil, meaning that the decision would have minimal impact within the nation, but other countries – particularly those in Eastern Asia – could benefit greatly from the sanctions lift. Nevertheless, the sanctions still prohibit Iranian oil from being sold to certain regions or nations, like North Korea or Cuba.

The move also comes just days after the department announced the lifting of sanctions on Russian oil at sea, allowing an additional 130 million barrels to be sold across the world.

In both of these situations, some experts project that the moves could have no impact on either gas prices nor the economies of Russia and Iran, while others thought the opposite– the actual effects that will occur due to these decisions are still unknown.

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