I. Introduction

As Figure 1 shows, the Strait of Hormuz, a vital maritime choke point for global energy trade, has experienced ongoing geopolitical and economic disruption since 28 February 2026, following joint military strikes by the US and Israel on Iran, which included the killing of Iran’s supreme leader Ali Khamenei. In response, Iran launched retaliatory drone and missile attacks on US military bases, Israeli territory and other Gulf states, while its Islamic Revolutionary Guard Corps (IRGC) issued warnings prohibiting vessel or ship passage through the Strait, leading to an effective halt in shipping traffic.

Figure 1: Map of the Strait of Hormuz (source: http://www.drishticuet.com)

The warnings and subsequent attacks on ships caused a sharp decline in maritime transit, with tanker traffic declining first by approximately 70% and over 150 vessels anchoring outside the Strait to avoid risks, and soon traffic went to about zero. [1] This disruption affected approximately 20% of the world’s daily oil supply and significant volumes of liquefied natural gas (LNG), prompting major shipping firms to suspend operations in the area. Oil and gas prices surged, with Brent crude oil rising to US $126 per barrel at its peak, amid fears of prolonged supply shortages that could push prices toward $100 per barrel. Crude oil prices surpassed $100 per barrel on 8 March 2026 for the first time in four years and then fell. However, as Iran’s new supreme leader, Mojtaba Khamenei, said that the Strait of Hormuz should remain closed and that Iran will continue attacks on its Persian Gulf neighbors, Brent crude oil price jumped back above $100 per barrel on 12 March 2026, as Figures 2 show.

Figure 2: Brent crude oil price, 2026 (Source: Trading Economics)

This de facto closure of the Strait of Hormuz by Iran sends shock waves across global energy markets,

Soaring oil prices have forced US President Trump to provide temporary sanctions relief to Russia on March 12, as well as Iran on March 20.

Despite temporary lifting on both Russian and Iranian oils, prices of oil such as the Brent crude oil keep on rising as Figure 3 shows.

This paper analyzes the impacts of US temporary lifting on both Russian and Iranian oils on global oil prices. In doing so, this paper first examines whether Iran and Russia have increased production, exports, and revenues of oil in March 2026 after the temporary lifting. The paper finally explores whether US temporary lifting on both Russian and Iranian oils has stabilized global oil prices.

Figure 3: Oil Prices Kept Rising Despite US lifting sanction on Iranian and Russian oils (source: EIA and CFR)

II. What does lifting sanctions on Russian and Iranian oils mean?

1. A flurry of sanctions on Russian oil and lifting

Over the past three years, sanctions by the Western countries have placed sustained pressure on Russia’s oil trade. These measures have focused less on halting flows outright and more on constraining the infrastructure that underpins oil exports, in particular shipping, financing and insurance, to reduce revenues while still keeping global markets supplied.

The EU moved first to cut its own dependence on Russian oil, imposing a ban on seaborne imports of Russian crude oil in December 2022, followed by a ban on petroleum products in February 2023. Limited exemptions were granted to a few landlocked and energy-dependent EU member countries, including Slovakia and the Czech Republic and Hungary, allowing continued pipeline imports under strict conditions. The Czech Republic definitively stopped any remaining imports of Russian oil in April 2025; Slovakia and Hungary still have not.

In December 2022, EU and G7 also addressed third-country trade by introducing a price cap on Russian seaborne crude delivered to non-EU and non-G7 countries. It was initially set at a fixed level of $60 per barrel, whereby Russian oil could continue to flow to countries such as India and China, but only if sold at or below the cap when Western shipping, insurance or financial services were used.

In late 2025, the EU shifted from a fixed threshold to a dynamic pricing mechanism, whereby the cap is set at 15 percent below the average market price of Urals crude oil – Russia’s main export grade – over the previous six months, a formula that lowered the effective cap to around $48 per barrel at the time of its introduction. As of mid-January 2026, the price cap was over $44 per barrel.

The price cap’s effectiveness relies on Western dominance in maritime insurance and trade finance, which underpin the global oil trade. By conditioning access to these services in compliance with the cap, Western countries sought to exert leverage over Russian oil exports beyond their own borders.

However, on March 12, the US temporarily lifted sanctions on Russia by issuing waivers through the Treasury Department’s Office of Foreign Assets Control (OFAC). The most impactful waivers, which focus on Russian crude oil already loaded on ships and vessels, are: [2]

General License (GL) 134A: Waiver for the delivery and sale of Russian crude oil and petroleum products loaded on ships and vessels issued on March 19. (The original version of GL 134 was already issued on March 12.) This thirty-day waiver authorizes all transactions necessary to the sale, delivery, or off-loading of Russian crude oil or petroleum products loaded on any ship and vessel on or before March 12, 2026, including OFAC-sanctioned vessels. The waiver excluded certain sanctioned nations and regions from its authorization. The waiver expires on April 11, 2026, unless renewed by OFAC. It does not mention the price cap on Russian crude oil and petroleum products and does not include prohibitions on payments. (OFAC issued a waiver (GL 133) on March 5 that authorized the sale and delivery of Russian crude oil already on vessels, so long as the delivery and off-loading occur at an Indian port and the buyer is an Indian entity.

This announcement did not come out of nowhere. On March 5, the US first gave India a thirty-day waiver allowing it to buy Russian oil already at sea. It has now widened that relief to other cargoes loaded before the new cut-off. The aim is to get more oil supply onto the market fast and limit the shock from the Iran war on global oil markets.

The latest US move to ease sanctions is expected to affect approximately 125-130 million barrels of Russian oil, which Russia said were currently in transit. Around 130 million barrels of Russian oil were at sea before March 12, according to energy data tracker Kpler.

2. Sanctions on Iranian oil and lifting

Sanctions against Iran are extensive measures mainly imposed by the US, EU, and UN targeting its energy, military, and financial sectors due to nuclear, drone, and missile activities. Key restrictions include oil export bans, asset freezes on the IRGC, and bans on dual-use technology. Key US partners such as the UK, Australia, and Canada maintain aligned restrictions.

However, the US government temporarily eased sanctions on Iran by issuing waivers through the Treasury Department’s Office of Foreign Assets Control (OFAC). The most impactful waivers, which focus on Iranian crude oil already loaded on ships and vessels, are: [3]

GL U: Waiver for the delivery and sale of Iranian crude oil and petroleum products loaded on vessels and ships issued on March 20. This thirty-day waiver is similar to GL 134A. It authorizes all transactions necessary to the sale, delivery, or off-loading of Iranian crude oil or petroleum products loaded on any vessel and ship on or before March 20, 2026, including OFAC-sanctioned vessels. The waiver also authorizes imports of Iranian crude into the United States only when necessary to complete an authorized transaction. The waiver excluded certain sanctioned nations and regions from its authorization. The waiver expires on April 19, 2026, unless renewed by OFAC. It does not include prohibitions on payments.

As a result, the US actually lifted sanctions on about 140 million barrels of Iranian crude already loaded onto vessels, which the Trump administration says will help lower global oil prices — but which is also likely to provide revenue for Iran’s war effort.

US Treasury Secretary Scott Bessent wrote on X. “By temporarily unlocking this existing supply for the world, the US will quickly bring approximately 140 million barrels of oil to global energy markets, expanding the amount of worldwide energy and helping to relieve the temporary pressures on supply caused by Iran.” [4]

Trump Administration officials claim that such oil is already making its way to China at a discount, and lifting the sanctions will allow it to flow to other nations and regions. “Iran will have difficulty accessing any revenue generated and the US will continue to maintain maximum pressure on Iran and its ability to access the global financial system,” Bessent wrote.

III. The Impacts of lifting sanctions on Iranian and Russian oils on global oil price

1. Did Iran increase production, exports, and revenues of oil after lifting sanctions in March 2026?

a. Oil exports
The US lifting of sanctions on some Iranian oil on March 20, 2026, does not seem to have positive impacts on oil production, exports, and revenues of Iran in March 2026. This is because the lifting only permitted the sale of Iranian oil currently stranded at sea at that time of March 20. That is, the permission was applicable to the sale of crude oil and petroleum products of Iranian origin currently loaded on vessels and ships. The move of US lifting brought approximately 140m barrels of Iran oil to global energy markets.

However, the Strait of Hormuz has been closed following US-Israel attacks on Iran on February 28, 2026. Only a handful of oil tankers have managed to pass through the Strait of Hormuz since hostilities began on February 28. Traffic of ships transporting crude oil has come to a standstill. The only alternative routes are two pipelines, in Saudi Arabia and the United Arab Emirates, which allow part of the oil production to be rerouted to the Red Sea and the Gulf of Oman. However, oil shipping through these alternative routes has been limited.

Therefore, Iranian exports of oil through the Strait of Hormuz were not easy to increase while the US-Iran war has been under way.

As Figure 4 shows, oil exports from Gulf states have significantly dropped in March 2026. The one exception has been Iran, which, notably, has managed to ship its oil almost as usual.

Iranian oil exports remained high in the first quarter 2026, with an estimated 1.51 million barrels per day in January 2026, 2.04 in February and over 1.8 in March. Iran has continued to ship nearly 1.8 million barrels per day from Kharg Island, the main export terminal for Iranian crude oil. This volume of 1.8 million barrels per day is lower than in February, when Iran was ramping up shipments in anticipation of the looming war, but is a little higher than in January. While Iran has threatened to attack any “hostile” vessel and ships attempting to pass through the strait with missiles and drones, its own oil tankers are crossing the passage unhindered to deliver crude oil to Asian countries, including China, its main customer.

Figure 4: Drop in oil exports by Iran, Iraq, UAE, Kuwait, Saudi Arabia, and Qatar, March 2026 (source: Kpler & IEA & Le Monde)

By contrast, as Figure 5 shows, shipping data from Kpler show that combined exports from Saudi Arabia, Iraq, Kuwait, Oman, Qatar, and the UAE dropped from 469 million barrels in February 2026 to 263 million barrels in March 2026 – a significant decline of 206 million barrels, or 44 percent.

Iraq’s crude exports have been hit the hardest, falling 82 percent from 94m barrels in February 2026 to 17m in March 2026.

Kuwait and Qatar each lost around three-quarters of their crude shipments, with 75 and 70 percent drops, respectively.

Saudi Arabia and the UAE managed a smaller proportional drop of 34 and 26 percent respectively, in part offset by floating storage and pipelines that avoided the Strait of Hormuz.

Figure 5: crude oil exports from six Gulf states fell from 469 million barrels in February 2026 to 263 million barrels in March 2026 (source: Kpler and Aljazeera)

b. Oil production
With no ships available to transport their oil through the Strait of Hormuz, Gulf oil-producing countries are worried that their onshore storage facilities will reach capacity. Caught in the crossfire of the war between Iran and Israel/US, all Gulf states are forced, to varying degrees, to cut oil production.

As Figure 6 shows, between the beginning and end of March 2026, oil production dropped by 25% in Saudi Arabia, by 59% in UAE, by 64% in Qatar, by 65% in Kuwait, and by 78% in Iraq. Iran is no exception. Iranian oil production fell by 13% in March, according to Kpler. The challenge for Gulf states that are still able to do so is to delay as long as possible the point at which storage facilities are completely full. In other words, to produce little but continuously, in order to avoid a shutdown with highly damaging consequences. Some wells, once shut down, become difficult to restart or even unusable.

Figure 6: Iran war reduces oil production (crude oil & condensates in thousands of barrels per day) of Iran & Gulf states, 2026

13% reduction in Iranian oil production is one of the most concrete signs of the control that Iran has asserted over the Strait of Hormuz: While supply from neighboring countries has evaporated, Iranian oil activity has remained virtually unchanged since the start of the Iran war.

c. Oil revenues
However, as Figure 7 & 8 shows, the Reuters analysis of export data in March 2025 and 2026 found that Iraq and Kuwait’s estimated notional oil export revenues both plunged by about three-quarters year-on-year. Conversely, Iran’s revenues rose by 37% and Oman’s by 26%. Saudi Arabia’s oil revenues increased by 4.3%, while the UAE’s declined by 2.6% as the oil price surge offset lower volumes.

Figure 7: Notional Gulf year-on-year oil revenues change in March 2026 (source: Kpler & JODI Ahmad Chaddar)

Figure 8: Notional monthly oil revenues for Gulf states (source: Kpler & JODI Ahmad Chaddar)

As Figure 8 shows, Iran’s revenues rose by 37% from $ 4.18 billion in March 2025 to $ 5.72 billion in March 2026.

2. Did Russia increase production, exports, and revenues of oil after lifting sanctions in March 2026?

It is hard to examine production, exports, and revenues of oil in Russia due to data limitations. Approximately 56-67% of Russian crude oil is transported by a “shadow fleet” of tankers, allowing it to bypass Western sanctions and price caps. Therefore, it is hard to examine exports and revenues of oil in Russia. As a result, this paper relies on data from Kpler which tracks Russian shipping on water.

a. Oil exports
As Figure 9 shows, in the first half of March 2026, US-sanctioned companies (Rosneft, Lukoil, Gazpromneft, and Surgutneftegaz) increased their share in crude oil exports to 18% from 5% in January–February 2026. Over the same period, the share of UAE-based companies Redwood Global Supply FZE LLC and Alghaf Marine DMCC in Russian crude oil exports slightly declined to 34%, compared to 39% in February 2026. As Figure 10 shows, these sanctioned companies increased their share in oil product exports to 18% from 11% in February 2026, while the share of two UAE-based companies remained broadly stable at 18% in the first 15 days of March vs 21% in February 2026. [5]

Figure 9: Russia seaborne crude oil exports by selling companies, %. (Source: Kpler & KSE Institute)

Figure 10: Russia seaborne oil product exports by selling companies, %. (Source: Kpler & KSE Institute)

On the other hand, as Figure 11 shows, as of March 20, 2026, volumes of Russian crude oil on the water reached 160 million barrels per day. It was the highest level since the Russian invasion of Ukraine in February 2022, 8% above on March 12, 2026, when the US temporarily lifted sanctions on Russian oil loaded on or before 12 March.

Figure 11: Weekly volumes of Russian crude oil on the water, million barrels of per day (Source: Kpler)

The volume of Russian oil products at sea in March 2026 barely changed, fluctuating between 93–95 million barrels per day.

However, oil exports in Russia (as well as production) have faced serious difficulties as Ukraine has attacked Russian oil facilities and harbors in March 2026. Aerial drone attacks forced a major Russian oil terminal to halt operations.

As Russia has benefited from soaring global oil prices and an easing of US sanctions, Ukraine has been trying to offset the windfall by escalating strikes on Russian oil assets. Experts describe a campaign unprecedented in scale, with Ukraine claiming responsibility for 10 attacks in March 2026, although the true number might be much higher.

The most significant strikes have hit Russia’s Baltic ports of Primorsk and Ust-Luga, which handle approximately 40 percent of Russia’s seaborne crude exports.

Local authorities in Russia reported damage at both ports, and the number of tankers loading oil there has significantly dropped, according to an analysis of trading activity by Bloomberg.

Recent data shows that no ships and vessels were loaded with oil in any of Russia’s three Baltic ports on 26 and 27 March, 2026 which Crea said is the first period of two consecutive days with no such activity since Russia launched its full-scale invasion of Ukraine in 2022.

Satellite images show enormous plumes of smoke rising from burning oil facilities in Primorsk on 24 March, as well as fires at Ust-Luga and extensive damage to Kirishi on 27 March. [6]

As a result, Russian seaborne oil exports have declined by about 1.75 million barrels per day as repeated Ukrainian drone strikes knocked key Baltic oil terminals out of order, Bloomberg reported, citing shipping data and sources.

Weekly (March 23-29) crude flows fell to 2.32 million barrels per day to March 29, down from 4.07 million barrels per day of the previous week (March 16-22), according to Bloomberg data.

Only 22 tankers loaded 16.23 million barrels of Russian crude in the week to March 29 compared to 28.5 million barrels on 37 ships the previous week.

The sharp drop was driven by disruptions at Ust-Luga and Primorsk, where repeated Ukrainian drone strikes halted shipments for much of the week.

Combined exports from the two Baltic ports fell to their lowest level since the start of Russia’s 2022 invasion of Ukraine, Bloomberg said.

b. Oil production
Russian oil output cuts are unavoidable in March 2026 as Ukraine’s drone attacks have damaged Russian oil exports.

As Russia has benefited from soaring oil prices and an easing of US sanctions, Ukraine has attempted to offset the windfall by escalating strikes on Russian oil assets. Experts describe Ukraine campaigns in March 2026 unprecedented in scale. As Figure 12 shows, Ukraine’s strikes on Russian port infrastructure, pipelines and refineries have reduced Russian export capability by 1 million barrels per day, or a fifth of total capacity, three industry sources said on April 2. [7]

BBC Verify confirmed at least three oil sites in Russia’s Leningrad region have been attacked since 23 March, including the ports of Primorsk and Ust-Luga, and the inland Kirishi oil refinery.

In its heaviest drone strikes of the more than four-year war, Ukraine has targeted the Baltic ports of Primorsk and Ust-Luga, as it seeks to weaken the Russian economy.

At least 20% of Russia’s total export capacity is out of order in April 2026, down from a peak of 40% in March, but still enough, according to three industry sources, to have a major impact on Russian oil production, the world’s third largest after the US and Saudi Arabia.

Figure 12: Ukraine’s attacks on Russian Baltic oil sites (source: BBC)

According to Finland-based Centre for Research on Energy and Clean Air (Crea), 20% of Russia’s total oil exports departed from Ust-Luga and 22% from Primorsk.

Recent data shows no ships were loaded with oil in any of Russia’s three Baltic ports on 26 and 27 March, 2026 which Crea said is the first period of two consecutive days with no such activity since Russia launched its invasion of Ukraine in 2022.

As a result, some oilfields in Russia will have to reduce their output to avoid flooding the pipeline system.

Even before recent Ukraine attacks on the Baltic ports, Russia’s oil export capacity had been squeezed as its Druzhba pipeline, which supplies oil to Slovakia and Hungary, has been suspended since January 2026.

Therefore, oil production is expected to drop in March and April 2026. The Organization of the Petroleum Exporting Countries (OPEC) has said that Russian oil production stood at 9.184 million barrels per day in February 2026. The source could not say how much oil output might be cut in March 2026. Data on Russian oil production in March 2026 is not available.

Russian oil output fell by only 0.8% to 10.28 million barrels per day last year, accounting for around a tenth of global production, despite Western sanctions and Ukrainian drone attacks on refineries, according to Russian data.

c. Oil revenues
On March 12, 2026, the US lifted restrictions on the purchase of Russian oil and petroleum products already loaded onto tankers. After that, the price of Urals crude oil began to rise sharply.

Before the outbreak of the Iran war, Russian oil was selling at its biggest discount since 2023. At that point, it was US $30.62 cheaper than Brent, with the price per barrel standing at US $40-42. [8]

As Figure 13 shows, however, on April 2, according to Argus data, Russian Urals shipped from the Baltic Sea port of Primorsk sold for $116.05 per barrel, while cargoes from the Black Sea port of Novorossiysk reached $114.45.

That marks about 230% increase since December 2025, when Urals crude was traded below $40 per barrel under the weight of US sanctions.

Brent crude oil price surged from $60 per barrel in February 2026 to over $112 in March. Urals price jumped to $102 on the spot market. For comparison, the G7 and EU price cap on Urals crude at the time stood at $44. Russia was selling oil at 2.3 times the “maximum allowed” price under the international sanctions’ framework.

Thanks to the oil price spike, Russia’s daily revenue from oil sales during the Iran war of March has been on average 14% higher than in February, according to the Crea. Russia has been earning 510 million euros ($588 million) every day in March 2026 from oil and liquefied natural gas exports, according to Isaac Levi of the Crea.

Figure 13: Figure 13: Urals crude oil price spike (source: Argus Media & Bloomberg)

According to the Crea, 24-days after the start of the Iran war, Russia’s average daily oil export earnings have reached an estimated €388 million per day, 20% above its daily average in February 2026.

The Financial Times branded Russia the “biggest winner” from the Iran war, saying its daily revenues spiked by $150 million.

“The price of Russian Urals crude rose with it, and the discount between Russian oil and global benchmarks has largely collapsed.” [9]

According to various reports, the Iran war and the paralyzed shipment in the Strait of Hormuz could add close to $5-7 billion of revenues to Russia’s budget depleted by its ongoing aggression in Ukraine.

Since launching its full scale invasion of Ukraine in 2022, Russia has faced sweeping international sanctions that forced it to sell its oil to China and India at steep discounts.

In recent weeks, however, the US has relaxed some of those measures, allowing countries such as India to resume buying Russian crude.

The waiver saw India’s average daily imports of Russia’s oil jumping by 82% in the first three weeks of March compared to February’s average, according to Crea’s figures.

Revenues from Russia’s key customer, China, have likely increased significantly as well. But Russia’s ability to export is severely impacted by Ukraine’s attacks in March 2026.

At least 40% of Russia’s oil export capacity is at a standstill in March 2026 as a result of these attacks, according to Reuters.

As a result, oil revenues will be significantly reduced in late March and April 2026 and near future.

3. Has global oil price stabilized after lifting sanctions on Iranian and Russian oil?

After the US temporarily lifted sanctions on Russian and Iranian oil on March 12 and 20, respectively, global oil prices continued to soar. As Figure 14 shows, Brent crude oil price moved above 100 dollars per barrel on March 12, 2026, and around 110 dollar per barrel on 20-31 March, which is quite higher than in January and February 2026.

Despite temporarily lifting sanctions on both Russian and Iranian oils, therefore, the price of global oil keeps on rising as Figure 14 shows. Moreover, since the US temporarily lifted sanctions on Russian oil on March 12, Russian Urals crude oil price has skyrocketed in March 2026, as Figure 15 shows.

Figure 14: Global oil prices are rising despite US reversal on Iranian and Russian sanctions (Source: US EIA & CFR)

Figure 15: Urals crude oil price, March 2026 (Source: Trading Economics)

Then a question arises “Why lifting sanctions on Iranian and Russian oils has not stabilized global oil price?” This is because by lifting sanctions on Iranian and Russian oils, more oils have been provided to global oil markets. Nonetheless, global oil prices have been rising.

There are several factors that affect global oil prices. The most important factors affecting current global oil prices are the closure of the Strait of Hormuz and ongoing Iran war. Without reopening the Strait of Hormuz and ending the Iran war. global oil prices cannot be stabilized.

Moreover, lifting sanction on both Iranian and Russian oils is limited to crude oil and petroleum products that were already loaded on vessels on or before the issuance date. Kpler estimated that there were around 130 million barrels of Russian crude oil in transit as of March 13 and that about 140 million barrels of Iranian oil on the water as of March 20. The US decision to lift sanctions is apparently designed to clear cargoes already at sea rather than stimulate fresh oil demand and increase oil production. Therefore, the impacts of temporarily lifting sanctions on a small portion of Russian and Iranian oil for 30 days on global oil prices are small and limited.

Erickson questioned whether this US action will have much of an impact on global oil prices. Europe still has sanctions on Iranian and Russian oils, he said, and the firms that purchase them would still be taking a considerable risk. “The market knows this,” he said. “That’s why global oil prices are unlikely to be impacted significantly by US lifting.” [10]

IV. Conclusion

This paper analyzed the impact of the lifting of US sanctions on Russian and Iranian oil on global oil prices. To this end, the paper first analyzed whether Russia and Iran actually increased their crude oil production and exports during the period of March 2026 following the Trump administration’s lifting, and whether their profits increased as a result.

In March 2026, although Iran’s crude oil exports and production remained steady, they dropped slightly compared to February 2026 due to the impact of the ongoing Iranian war and the continued blockade of the Strait of Hormuz. Nevertheless, Iran’s crude oil profits increased somewhat due to the surge in international oil prices.

On the other hand, while Russia’s crude oil exports increased slightly prior to March 22, both exports and production decreased significantly after March 23 due to Ukraine’s attack on Russian oil facilities. However, Russia’s crude oil profits increased substantially as the price of Russian Urals crude oil skyrocketed following the lifting.

Finally, this paper demonstrated that the lifting of sanctions by the US failed to stabilize global oil prices at all and, on the contrary, international oil prices surged during the month of March. The paper argued that the US decision to lift sanctions was merely intended to clear Iranian and Russian crude oil cargoes already loaded at sea, rather than to stimulate new crude oil demand and lead to increased oil production; therefore, the temporary lifting of sanctions on a small portion of Russian and Iranian crude oil had an influence that was inevitably too insignificant and limited to stabilize international oil prices.