Treasury Secretary Scott Bessent issued a 30-day general license on Monday allowing Russian seaborne oil to move through global markets in an effort to ease supply shortages caused by the closure of the Strait of Hormuz.
The decision comes as the Iran conflict has cut into Middle East production and left global supply trailing demand for the year. Oil prices have climbed sharply in response, with crude futures for June 2026 rising about 60 percent since fighting began in late February.
Bessent announced the temporary measure on X, saying it would give vulnerable countries access to Russian oil that is currently stranded at sea. The license, he wrote, would "provide additional flexibility" and help "stabilize the physical crude market."
Officials said the move is intended to direct existing supplies toward the countries that need them most while limiting China’s ability to stockpile discounted crude. Treasury staff are already working with individual nations on more tailored licenses where required.
The United States Oil Fund, which tracks WTI futures, has jumped 82 percent over the same period that broader crude prices have risen. Energy analysts have noted that any prolonged blockage of the Strait of Hormuz could keep upward pressure on prices for months.
"The world is facing the biggest energy security threat in history," said Fatih Birol, executive director of the International Energy Agency.
Aramco chief executive Amin Nasser warned separately that global energy markets could face a multi-year disruption if oil shipments through the Strait remain blocked. His comments underscored the scale of the challenge facing importers that rely on Middle East crude.
Bessent’s license does not lift broader sanctions on Russia but creates a narrow window for seaborne cargoes to reach buyers. The 30-day period is meant to buy time while diplomats and energy officials seek longer-term solutions.
Market participants have watched closely for any sign that Washington would adjust its sanctions posture amid the supply crunch. The general license marks the first such step since the Hormuz closure began affecting flows.
Countries in Asia and Europe that have limited storage or refining options stand to benefit most from the temporary reprieve. Officials in several capitals have already contacted Treasury to discuss how the new flexibility might apply to pending shipments.
Oil traders said the announcement helped ease some of the immediate panic that had driven prices higher in recent sessions. Still, they cautioned that the underlying supply gap remains large and could widen if the conflict drags on.
Bessent emphasized that the license is narrowly drawn and will be reviewed before the 30 days expire. He added that Treasury continues to monitor tanker movements and will adjust policy if market conditions change.
Energy security experts noted that rerouting Russian barrels could reduce some of the strain on global benchmarks, though it will not replace the volumes previously moving through the Strait of Hormuz. The coming weeks will show whether the measure achieves its stated goal of stabilizing prices.
Further updates from Treasury are expected as more specific licenses are finalized with individual governments. Market watchers will be looking for any indication that the 30-day window might be extended or modified.