Oil drops after U.S. issues license for countries to buy Russian oil stranded at sea for 30 days

Oil prices dropped on Friday morning after the U.S. issued a 30-day license for countries to buy Russian oil and petroleum products currently stranded at sea, easing supply concerns.

Brent futures dropped 71 cents, or 0.71%, to $99.75 a barrel by 0123 GMT, ‌and U.S. West Texas Intermediate (WTI) crude was down 88 cents, or 0.92%, to $94.85.

The license was issued in what Treasury Secretary Scott Bessent said was a step to stabilise global energy markets roiled by the war in Iran.

“Issuing the license has eased market concerns, but it won’t resolve the most fundamental issue. The most important thing is the restoration of navigation in the Strait of Hormuz,” said Yang An, analyst ⁠at Haitong Futures.

The announcement on Russian oil came a day after the U.S. Energy Department said the U.S. would release 172 million barrels of oil from the Strategic Petroleum Reserve in an effort to curb skyrocketing oil prices in the wake of the war in Iran.

That plan was coordinated with the International Energy Agency, which has agreed to release a record 400 million barrels of oil from strategic stockpiles, including the U.S. contribution.

Oil prices surge above $100 despite historic IEA reserve release as Hormuz crisis deepens

Fleeting relief sparked by the IEA release, however, was shattered by a dangerous re-escalation of Middle East risks, IG analyst Tony Sycamore said in a note.

Both benchmark prices surged more than 9% on Thursday and hit their highest levels since ‌August 2022.

Iran’s ⁠new supreme leader Mojtaba Khamenei said Iran would fight on and keep the Strait of Hormuz shut as leverage against the United States and Israel.

Two fuel tankers in Iraqi waters were struck by explosive-laden Iranian boats, Iraqi security officials said on Thursday. An Iraqi official told state media that the country’s oil ports have completely stopped operations.

Oman shifted all vessels out of ⁠its main oil export terminal at Mina Al Fahal, outside the Strait of Hormuz, in a precautionary move, a Bloomberg News report said on Thursday.

Still, other measures are being taken to try to curb the rising risks.

Bessent ⁠told Sky News in an interview that the U.S. Navy, perhaps with an international coalition, would escort vessels through the Strait of Hormuz when it is militarily possible.

Saudi Arabia is reportedly paying a premium to reroute tankers ⁠to the Red Sea, using its East-West pipeline to transport oil to global markets.

Meanwhile, Iran is allowing one or two tankers a day through, mainly to China, keeping China on its side and cash flowing, IG’s Sycamore said in his note.

A two-fold challenge for the EU

This US decision does create a two-fold challenge for the EU. First, it effectively undermines efforts to tighten enforcement against Russia’s shadow fleet and sanctions-evasion tactics. While the license does not directly lift broader US or G7 restrictions on Russian oil (including the price cap mechanism), it temporarily authorises purchases of already-loaded, stranded cargoes that might otherwise face scrutiny or practical barriers due to Western pressure on insurers, shippers, and ports.

Second, non-EU countries gain a clear short-term advantage. They can now legally acquire these sanctioned-origin cargoes without the compliance risks that EU-based companies and operators face under strict EU sanctions regimes. Conversely, EU importers remain bound by their own import bans and secondary measures, limiting their access even as global supply tightens and prices soar. This asymmetry risks putting European refiners and consumers at a competitive disadvantage during a period of extreme energy volatility driven by the Middle East conflict.

With Reuters, with additional content by EUalive.

Caption: A handout photo made available by the Belgian Defense Ministry on 1 March 2026 shows Belgian army intercepting and boarding oil tanker Ethera, registered in Guinea, sanctioned by the EU and linked to Russa’s so-called shadow fleet, during operation Blue Intruder in the North Sea off Zeebrugge, Belgium, overnight from 29 February to 1 March 2026. Belgian Defence Minister Francken announced that the Belgian army boarded and seized the oil tanker Ethera believed to be part of Russia’s shadow fleet and called operation Blue Intruder a first for Belgium. EPA/JORN URBAIN/BELGIAN DEFENCE MINISTRY / HANDOUT