My enemy's enemy's oil

On Thursday, the US Treasury issued a temporary licence allowing countries to purchase Russian oil currently stranded at sea. The same day, Brent closed above $100 per barrel for the first time since August 2022. Bessent wrote on social media that the measure is "narrowly tailored" and "short-term" 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."

The irony does not need underlining, but it is worth pausing on. Washington imposed sanctions on Russian oil to punish Moscow for invading Ukraine. Now it is partially lifting them because its own war against Iran has closed the Strait of Hormuz and taken 20% of the global crude supply off the market. The IEA's strategic reserves, 400 million barrels released on Wednesday, failed to push the price below $100. So they turn to the supplier they were trying to strangle. Russia, which is also advising Iran on drone tactics according to Western intelligence, now gets to sell oil to the world with American permission.

Trump said preventing Iran from having nuclear weapons is "of far greater interest and importance to me" than the cost of crude. A statement consistent with his logic, but the American voter paying $3.57 a gallon for petrol may have a different set of priorities. The war with Iran is indirectly funding Russia, weakening the sanctions regime that underpins the Western position on Ukraine, and raising the cost of living for ordinary Americans. All at the same time. Realism has a way of doing that.