Trade operates independently from political talk, and it’s tangible and measurable, which can cut through the noise of trade announcements. The real impact is seen in how trade is actually happening.
This week, numerous headlines indicated that Gulf energy is now a focus of the ongoing conflict. Countries are now hoarding energy reserves out of self-preservation.
Energy experts warn that the recent measures from the Trump Administration to lower oil prices are just empty promises, lacking real solutions.
“The Iranian sanctions are merely announcements meant to show action,” said Daniel Tannenbaum, a partner and leader in the global anti-financial crime practice at Oliver Wyman. “This is all about messaging: 'Look at all the steps we are taking to increase supply,' but that's not how it actually works.”
Tannenbaum pointed out that oil prices didn’t significantly drop when sanctions on Russia were relaxed, despite the availability of previously banned oil.
“It’s all for show,” Tannenbaum explained. “Issuing a general license doesn’t automatically increase supply. There’s no proof this will actually lower market prices. Temporary licenses don’t create 'new oil'—they just cover barrels that are already in motion.”
Another factor behind the rhetoric is that both Russian and Iranian crude oil already have established buyers.
“It's well known that Iranian tankers have been operating during this crisis, heading to countries like China,” said Andy Lipow, president of Lipow Oil Associates. “This oil has already been loaded and is on sanctioned tankers at sea, which makes it more available to Asian refiners. This move is baffling, as global banks stay distant from Iran, making financing an Iranian oil trade unlikely.”
Lipow also mentioned that the impact of this US policy change will be minimal since the European Union has not lifted sanctions on Russian oil imposed in 2022 and on Iranian oil from 2012.
Legal experts contend that even though previously sanctioned oil can now be transported legally, it doesn’t guarantee that insurers like Lloyds of London and Marsh will cover these aging vessels or that banks will facilitate these transactions.
“If a Western company wants to purchase Iranian oil on those tankers, they need insurance policies to safeguard the movement of the ship or cargo, and a bank to process that transaction,” Tannenbaum clarified. “Realistically, it's unlikely that Lloyd's or any bank would take this on.”
The issue of which countries receive the profits from these sales is also a concern.
“Initially, the general license was supposed to detail how funds from the Iranian oil sales would be managed,” Tannenbaum noted. “The idea was to use an escrow-like structure, ensuring the money didn’t go directly to Iran. However, that detail wasn’t included in the end.”
The other major news this week was the release of Strategic Petroleum Reserves by the US.
Government data revealed that more than half of the buyers for the US Strategic Petroleum Reserves (SPR) offering of 86 million barrels were oil companies.
The companies that participated took a total of 45.1 million barrels:
Delivery of the entire 172 million barrels from the SPR is expected to take about 120 days.
“These companies can sell it right away, but the oil will be shipped over the next two months,” Lipow clarified.
In early March, the Department of Energy announced that 32 member nations of the International Energy Agency, alongside the Trump Administration, will coordinate the release of 400 million barrels of oil and refined products from their strategic reserves.
“The Trump Administration is doing everything possible to increase oil supply quickly,” Lipow stated. “However, after offering 86 million barrels over two months, the SPR only allocated 45 million barrels, indicating possible logistical challenges in transporting the oil.”
There are only a limited number of tankers available to move the oil. The tight availability of tankers, along with longer transport times, has driven up the daily rates for these vessels to extremely high levels.