US Treasury secretary hints at lifting more Russian oil sanctions

US Treasury Secretary Scott Bessent said on Friday his government was considering lifting sanctions on more Russian oil, a day after it temporarily authorized India to buy from Moscow as global oil prices surged.

The US-Israel war on Iran and Tehran’s retaliatory attacks across the Gulf region have upended the world’s energy and transport sectors, virtually halting activity in the Strait of Hormuz.

Crude soared 8.5 per cent on Friday and was up nearly 30 percent for the week after President Donald Trump said only the “unconditional surrender” of Iran would end the Middle East war.

“We may unsanction other Russian oil,” Bessent told Fox Business on Friday.

“There are hundreds of millions of barrels of sanctioned crude on the water. And in essence, by unsanctioning them, Treasury can create a supply.”

Washington has insisted that the new measures are not aimed at easing restrictions on Moscow, imposed over its conduct in negotiations to end the war in Ukraine, but instead only affect supplies already in transit.

“We’re going to keep a cadence of announcing measures to bring relief to the market during this conflict,” said Bessent, with high oil prices a pain point both domestically and for international markets.

Kremlin economic adviser Kirill Dmitriev said he was discussing the issue with the United States, posting on X that: “Western sanctions have proven detrimental to the world economy.”

On Thursday, the US government temporarily eased economic sanctions to allow Russian oil currently stranded at sea to be sold to India.

It said the transactions, including from vessels blocked by various sanctions regimes, are authorized through the end of the day on April 3, 2026. aha/jgc/cms/tc Rising US fuel prices: Sean Robinson, a 54-year-old schoolteacher in the US capital Washington, did not realize how high gas prices had gotten until he arrived at the pump on Friday.

“That is a sizeable jump,” he told AFP, pointing to a neon sign showing $3.27 for a gallon of regular gasoline.

Robinson is among US consumers feeling the sting of a cost surge sparked by the US-Israel war on Iran, which sent oil prices soaring as Tehran effectively blocked the Strait of Hormuz after being attacked.

But the price hike comes at a politically sensitive time for President Donald Trump as midterm elections approach, hitting voters hard.

Expensive gasoline could also prompt the independent central bank to put the brakes on the world’s largest economy as it battles stubborn inflation.

Since last week, US average domestic fuel prices have risen 11 per cent, according to the AAA’s fuel price gauge.

It is the kind of move that Robinson said will have him cutting down on all but the essentials.

“It just determines what I’m going to do on a day-to-day basis,” he said. “Pretty much start thinking about (watching) Netflix, staying in the house instead of burning gas.”

Others at the gas station agreed.

“It impacts all areas of life,” said Toloria Washington, 39. “We are in a state of survival mode.”

Washington, who works in finance, said fuel expenses are non-negotiable for her. With prices rising at the pump, she had to make cuts elsewhere.

That, she said, is a problem for people already battered by years of high prices post-pandemic.

“That’s the key thing, it’s tapping into everybody’s basics,” she added. “It’s the basics. Daily survival of food, water, housing.”

US inflation hit a peak of 9.1 per cent during the pandemic. While it has cooled since then, analysts warn of risks of another pick-up.

“Inflation showed signs of accelerating prior to the jump in energy prices,” said KPMG chief economist Diane Swonk.

“That has left consumers in a sour mood,” she added.

Swonk warned that rising fuel prices added “insult to injury” for low-income Americans, who are already seeing higher healthcare costs and a tightening of welfare benefits under Trump.

Trump, who has bragged about oil prices falling during his term, sought to address the political fallout on Friday, telling CNN he expected prices to come down quickly.

His Republican party holds only a slim majority in both the House and Senate.

With midterm elections due in November, he will be hoping that voters do not let tightening household budgets weaken his political position.

Trump could see further complications if inflation from gasoline price hikes pushes the Fed to respond by keeping interest rates at a higher level. The central bank has a dual mandate of maintaining stable prices and maximum employment, but has one main tool to do so -- adjusting interest rates.

Raising them generally cools economic activity and reduces inflation while lowering them can spur activity, boosting the weakening employment market.

The prospect of more inflation due to oil prices raises the specter of what some analysts call a nightmare scenario.

“This could not come at a worse time for the Federal Reserve,” said KPMG’s Swonk. “It now has a dueling mandate with the risk that inflation not only lingers but accelerates.”

Agencies