US pauses sanctions on Russian oil, Brent continues to climb

(Sharecast News) - Energy prices remained under pressure on Friday, despite the US temporarily lifting sanctions on the purchase of Russian oil supplies stranded at sea. Global energy prices have soared since the US attacked Iran. As hostilities mount across the region, the Strait of Hormuz - a vital passage in the global supply of oil - has become too dangerous to pass. Around a fifth of the world's supply is normally transported through the narrow waterway between Iran and Saudi Arabia.

As a result, tankers have been left stranded and oil prices have rocketed. The International Energy Agency has warned that global crude supplies will hit their lowest level in four years this month.

In response, US Treasury secretary Scott Bessent late on Thursday announced a "temporary authorisation" to allow countries to buy stranded Russian oil for 30 days. He insisted that Donald Trump was "working to keep prices low" for Americans, who are already seeing hikes on the forecourt.

In a post on X, Bessent said: "This narrowly tailored, short-term measure applies only to oil already in transit and will not provide significant financial benefit to the Russian government, which derives the majority of its energy revenue from taxes assessed at the point of extraction."

Oil prices initially dipped on Friday morning before once again climbing back above $100. As at 1015 GMT, benchmark Brent was trading at $101.09 a barrel and West Texas Intermediate at $95.82. It is thought that the surge in oil prices has brought in around $150m a day in extra revenue for Russia.

Earlier on Thursday, Trump seemingly shrugged off the impact of higher energy prices on US consumers and the wider economy, however, posting on Truth Social: "The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money.

"BUT, of far greater interest and importance to me, as President, is stopping an evil Empire, Iran, from having Nuclear Weapons and destroying the Middle East and, indeed, the World. I won't ever let that happen!"

Richard Hunter, ahead of markets at Interactive Investor, said: "Despite the supply stimulus of 400m barrels of oil, as announced by the IEA, a further 172m barrels from the US and a temporary easing of sanctions on Russian oil already at sea, the price has remained stubbornly at or around $100. Even these measures will have little more than a temporary effect and the wider inflationary and global economic concerns remain front and centre as a result."