The US has extended by 30 days its waiver from sanctions for Russian oil purchases. Just days ago, US Treasury secretary Scott Bessent had ruled that out. This flip-flop is a relief.
Global oil supplies need all the help they can get if prices are to descend and every barrel has begun to count. Costlier oil has imperilled the global economy as inflation rises and growth weakens, including in America where petrol prices at pumps are averaging over $1 per litre, which is eye-popping by US standards.
This may explain President Donald Trump’s sudden magnanimity over Russian oil. It’s a fungible commodity; a supply shock anywhere reaches everywhere. In such a scenario, the origin of oil does not matter.
The waiver, which applies to oil loaded onto vessels, will help India in particular, given that it is among the biggest buyers of Russian oil; China buys more but gets most of it through pipelines.
For a lasting cool-off in hydrocarbon prices, however, the world needs Iran to ease its grip on the Strait of Hormuz that it re-tightened in response to a US blockade of its ports. Also, Tehran must stop menacing Red Sea traffic via a proxy militia. On its part, the US also needs to give peace a chance.