The US Treasury Department's Office of Foreign Assets Control (OFAC) issued a 30-day general license on March 12 to purchase Russian crude oil and petroleum products loaded on vessels before that day.

The purpose of this measure is to increase energy supply, explained US Treasury Secretary Scott Bessent. He emphasized that the measure is limited in time and volume, and therefore "will not provide a significant financial benefit to the Russian government, which derives most of its oil and gas revenues from oil production taxes," The Bell reports. However, this announcement had no significant impact on Brent crude prices—they settled above $100 per barrel in Asian trading today.

“There's actually not much Russian oil floating around, at least on a global market scale,” The Bell said in a commentary.

On March 6, when the US authorized India to purchase Russian oil, Kpler estimated the volume at 130mn barrels. Of this, at least 30mn barrels have since been purchased by Indian refineries. Kirill Dmitriev, a negotiator with the US, estimated the volume of Russian oil in transit at 100mn barrels. Bloomberg experts cite similar figures: 125-150mn barrels, of which 30-40mn are "Indian."

“China will likely buy up to a third of the total volume, leaving the rest of the market with little more than four to five days' worth of pre-war supplies through the Strait of Hormuz, which Iran has blocked,” The Bell opines.

With a protracted war increasingly likely, traders and analysts are downgrading their forecasts. A long-term risk scenario is the end of the intense phase of the Israeli-US war with Iran without the dismantling of the ayatollah regime.

The market is currently concerned about Iranian attacks on tankers, rumors of minefields, accumulated damage to the Persian Gulf's oil export infrastructure, and threats by Iran-allied Houthis to close both the Red Sea and the Suez Canal.

The International Energy Agency (IEA) announced the largest release of reserves in history – a mooted 400mn barrels – that temporarily calmed the market after markets were suffering from whiplash after oil prices rose to $120 per barrel on March 9 as the global energy crisis gathered momentum. Prices fell back to $85 again by the end of the day after Trump said the war was “pretty much over” and talk of releasing reserves appeared. However, after several tankers were hit in the following days prices have gone back above $100 and forecasts of oil reaching $150, assuming the strait doesn't open for another two weeks, are gradually becoming mainstream.

The main question for Russia is whether there are prospects for a genuine easing of oil sanctions, after the US already granted India a temporary 30-day waiver to buy Russian oil stored in ships. US President Donald Trump has left the door open to possibly extending the suspension of sanctions on Russia oil after that.

Dmitriev believes there are: "a further easing of restrictions on Russian energy resources appears increasingly inevitable" amid the growing energy crisis and despite "resistance from some Brussels bureaucrats," he wrote on social media.

As the White House makes its first tentative approaches to Tehran on opening ceasefire negotiations, Iran is also asking for sanctions relief and security guarantees as part of the list of three demands released on March 12.

The Strait of Hormuz is irreplaceable. Any new escalation in the Persian Gulf with a surge in oil prices will once again force people to consider lifting sanctions against Russia, writes Robin Brooks, a senior fellow at the Brookings Institution. And as bne IntelliNews argued in an editorial, it is highly unlikely that the straits will be opened any time soon.

Meanwhile, Russia continues to derive tactical benefits from high oil prices, much like 2022. According to the Financial Times, since the start of the Israeli and US campaign against Iran, its additional budget revenues have reached $150mn per day, totalling close to $2bn. And by the end of March, they could reach $5bn. The Centre for Research on Energy and Clean Air (CREA) separately estimated that Russia has pocketed $6bn in the first two weeks of war.

“To offset the collapse in oil and gas revenues in January and February, oil prices at $100 must hold for several months. But even unexpected windfalls are unlikely to save the Russian budget from a growing unplanned deficit—the spectre of sequestration is already looming large,” writes The Bell.