Srinagar, Mar 15: On Thursday evening, March 12, the United States Treasury Department issued an authorisation that would have been unthinkable eighteen months ago. It temporarily lifted sanctions on Russian crude oil already loaded onto previously sanctioned tankers, permitting those shipments to be sold and delivered to buyers across the world until April 11. The decision, announced by Treasury Secretary Scott Bessent, was framed as a narrow, short-term measure, a surgical intervention to stabilise global energy markets in the face of surging prices caused by the closure of the Strait of Hormuz.
In a single document, the Trump administration accomplished something that four years of Russian lobbying, European opposition, and Kremlin diplomatic pressure had failed to achieve: it acknowledged, in the language of executive action, that the global energy market cannot be stabilised without Russian oil.
Moscow understood the significance immediately. Russia’s economic envoy used the word “inevitable” a word chosen with precision, not haste. What is inevitable, in Moscow’s reading, is the conclusion that the sanctions architecture constructed at enormous political cost by the G7 after Russia’s 2022 invasion of Ukraine has now been structurally compromised by the same country that led its construction.
To understand Thursday’s decision, one must begin not in Washington but in the Strait of Hormuz – the 33-kilometre-wide passage between Oman and Iran through which approximately 20 percent of the world’s daily oil supply moves. Since the United States and Israel launched military operations against Iran, Iranian threats against commercial shipping have caused tanker movements through the strait to collapse. JPMorgan’s data shows crude exports through Hormuz have plummeted to approximately 4 million barrels per day, down from a normal 16 million. QatarEnergy, the world’s largest LNG exporter suspended production at its Ras Laffan facility, warning that restart could take weeks to months.
The market response was immediate and brutal. Brent crude surged toward $120 per barrel, a level not seen since 2022, with Bernstein analysts placing an extreme-case ceiling of $120-$150. Goldman Sachs calculated an $18 per barrel real-time risk premium embedded in current prices. The International Energy Agency took the extraordinary step of releasing 400 million barrels from strategic reserves a measure that had virtually no effect on market sentiment. Average American gasoline prices rose 17 percent from the war’s first day.
It was in this environment that the Trump administration concluded it needed more supply. And the only available source of significant stranded crude sitting on tankers at sea, sanctioned but physically accessible was Russian oil.
The European response was swift, unified, and unusually direct. Six of the seven G7 leaders had gathered this week and reached explicit consensus that sanctions on Russia should not be eased — whatever the energy emergency. The United States was the exception.
German Chancellor Friedrich Merz, speaking alongside Norwegian Prime Minister Jonas Gahr Støre, delivered the sharpest assessment. “We believe it is wrong to ease the sanctions,” he said, adding that Germany would not be “deterred or distracted” from supporting Ukraine by the war with Iran. Merz made a distinction that cuts to the heart of the policy debate: “There is a price problem, but not a supply problem”. In other words, the market disruption is speculative and psychological, driven by risk premiums, not by an actual physical absence of oil from global markets. Releasing Russian crude does not solve the Hormuz crisis. It solves Washington’s political problem while financing Moscow’s military one.
French President Emmanuel Macron echoed the concern, warning that Russia “may believe that the war in Iran will give it a respite, but it is mistaken,” and reaffirming that European sanctions on Russia would hold regardless of American decisions. Ukrainian President Volodymyr Zelenskyy, whose country is the direct victim of the war these sanctions were designed to constrain, described the American decision as a surprise delivered without prior consultation with European allies.
European Council President António Costa delivered the most structurally precise critique: “Russia is the only beneficiary of the current situation”. Costa’s point is analytically correct in a way that Bessent’s Treasury statement cannot refute. Russian oil revenues are primarily taxed at the extraction point, not the point of sale. Every barrel of Russian crude that reaches a buyer regardless of how it gets there, regardless of the sanctions relief’s stated “temporary” nature funds the Russian state’s military budget. The sanctions architecture existed precisely to interrupt that funding chain. Thursday’s authorisation does not merely pause the chain. It demonstrates that the chain can be broken whenever Washington decides its own economic interests require it.
The historical irony of the current American position deserves to be stated plainly. The United States went to war with Iran a military intervention that fractured Gulf energy supply chains, sent oil prices to near-decade highs, and disrupted the economies of its closest allies and the price of managing the energy consequences of that war is a diplomatic gift to the country it has sanctioned for four years over the invasion of a European democracy.
The Biden administration spent two years constructing the G7 oil price cap on Russian crude. The Trump administration spent months in its first term imposing “maximum pressure” on Iran. The confluence of these two strategic imperatives continued confrontation with Iran and continued pressure on Russia has now produced a contradiction that no amount of Treasury Department language about “narrow, short-term” measures can contain. Edward Fishman of the Council on Foreign Relations, author of Chokepoints: American Power in the Age of Economic Warfare, warned this week that the sanctions relief “might be prolonged indefinitely” and could “essentially dismantle the oil sanctions against Russia”.
From Srinagar, the implications of this week’s developments are legible through a specific strategic lens. India which purchases substantial volumes of discounted Russian crude and has navigated the post-2022 sanctions environment with considerable diplomatic agility finds itself in a momentarily eased position as Washington’s hostility toward Indian purchases of Russian oil effectively softens. Last summer, the Trump administration had imposed tariffs on India as punishment for buying Russian crude. This week, Washington is itself authorising that same crude to flow to global buyers.
For the broader regional energy picture, the Hormuz closure’s effect on Indian import costs, LNG prices reaching $22.5 per MMBtu in northeast Asian markets, and the disruption to Gulf supply chains all carry direct consequences for India’s inflation management and energy security planning. An India that pays more for energy pays less for everything else including the infrastructure investment and defence procurement that defines its current strategic posture.
The world’s energy order is being rewritten this week, in documents signed in Washington and in the waters of a 33-kilometre strait between Oman and Iran. The contradictions visible in both locations will not resolve themselves cleanly. They will compound.
This geopolitical report was compiled by the Foreign Affairs Desk of Rising Kashmir drawing on reporting by the New York Times, Reuters, CNN, Time, Euronews, CNBC, Fortune, and the Washington Post. All factual claims are sourced to published reporting as of March 15, 2026.
