US Loosens Russian Oil Sanctions as Hormuz Closure Forces 25% Pipeline Reroute
Updated
Updated · The New York Times · Jun 4
US Loosens Russian Oil Sanctions as Hormuz Closure Forces 25% Pipeline Reroute
3 articles · Updated · The New York Times · Jun 4
Summary
Russian oil sanctions were eased by the Trump administration to cushion supply losses from the blocked Strait of Hormuz, where Saudi and UAE pipelines can replace up to a quarter of normal seaborne flows.
U.S., Brazil, Canada, Kazakhstan and Venezuela are already raising output, while releases from the U.S. Strategic Petroleum Reserve help cover shortfalls and a small number of tankers still transit under protection.
Higher transport risk is still keeping energy expensive: California gasoline is around $6 a gallon and the U.S. average about $4.25, with insurers likely to add millions to tanker voyage costs even after mines are cleared.
Qatar may see its economy contract 9% because its LNG exports depend on the strait, while lost Gulf gas and fertilizer supplies are squeezing German industry and lifting food prices from Egypt to Indonesia.
The disruption is accelerating a broader rewiring of energy trade, after Gulf states already began planning new bypass pipelines as no quick return to prewar shipping flows is expected.