Democrats demand reversal of Russia oil sales to India

Democrats in Congress are demanding that the Trump administration immediately revoke sanctions waivers that allow Indian refiners to buy Russian oil as the Iran war hurts global energy markets.

D-Calif. Rep. Sam Liccardo, D-Ariz. “Your recent decision to provide a 30-day exemption is dangerous, self-defeating, and indefensible,” Sen. Ruben Gallego wrote in a letter to Treasury Secretary Scott Bessent shared exclusively with CNBC. “This renunciation constitutes action that provides an inexplicable material benefit to the enemy.”

The Treasury Department last week issued temporary 30-day sanctions allowing India to buy Russian oil in an effort to ease skyrocketing oil prices and traffic halts in the Strait of Hormuz caused by the war.

The rise in oil comes less than eight months before the November midterm elections, which could send Democrats to control the House and Senate. surveys It shows that voters are dissatisfied with President Donald Trump’s handling of the economy.

However, after the sanctions were lifted, reported It is stated that Russia is helping Iran to target US ships, aircraft and bases in the region. In the letter, Gallego and Liccardo warned against the temporary lifting of sanctions; which rewards Russia with a windfall for helping target U.S. troops in the Middle East.

“Instead of engaging in necessary contingency planning to ensure alternative resources were available to India and other allies, the Administration’s ill-fated approach has enabled Russia and other adversaries to profit from oil reserves previously constrained by sanctions and supported Russia’s efforts to harm U.S. troops and obstruct U.S. intelligence,” Gallego and Liccardo wrote in their letter. he wrote. “By providing this exemption, you have signaled that the United States will reward rather than deter attacks on our troops.”

About 20 percent of the world’s oil and natural gas passes through the Strait of Hormuz, which has been largely impassable since the beginning of the U.S. and Israeli offensive on Tehran.

Oil prices increased in the days when the war started. US crude oil rose above $108 per barrel on Sunday, as did the global benchmark Brentit quickly approached $110 per barrel. This caused gasoline prices in the United States to rise sharply on Sunday, reaching $3.44 per gallon. gasbuddy.

The price increases come as both parties try to win over economically anxious voters ahead of the November midterm elections that will determine whether Democrats or Republicans control Congress in Trump’s final years in office. Trump promised to cut costs, including gas prices, during the 2024 campaign; but his approval of the economy fell as voters expressed concerns about affordability.

Liccardo and Gallego, members of the House Financial Services Committee and the Senate Banking Committee, argue in their letter that the war made life less costly for Americans.

“A protracted conflict with Iran and broader military operations in the Middle East will only deepen the energy cost crisis, cause Americans to pay more at the pump, and worsen the affordability crisis facing too many Americans.”

Meanwhile, millions of barrels of Russian oil remain stranded at sea due to US sanctions imposed as punishment for Russia’s invasion of Ukraine.

Energy Minister Chris Wright defended the move to temporarily allow the sale of Russian oil to India, calling it a “pragmatic step” that diverted oil that would eventually be sold to China. He said it could help moderate price increases in the short term until the United States achieves its military objectives in Iran.

“We are not helping Russia by accelerating oil sales to stop the rise in energy prices and keep European and Asian refineries oiled,” Wright said. “We’re just doing pragmatic things to get us through a short period that will usher in a period of even lower energy prices.”

Referring to the reports about Russia’s intelligence sharing, Wright said, “There are rumors about this, we do not know whether it is true or not.”

He added: “Russia is an expert at creating problems around the world.”

Liccardo and Gallego asked Bessent if he planned to continue offering exemptions if the Strait of Hormuz remained closed. They also asked whether the Treasury Department had given advance notice of intelligence sharing between Russia and Iran and whether there were any conditions that would cause the exemption to be revoked.

The two also requested information about the administration’s immediate oil price stabilization plans before launching an attack on Iran.

They wrote about the questions: “The following questions address two different lines of responsibility. The first concerns the specific waiver decision and its immediate consequences for the integrity of sanctions, energy markets and union security.” “The second concerns the administration’s failures to plan ahead of unauthorized military action and its lack of coordination with allies and partners whose cooperation is vital to maintaining the American sanctions architecture, which the waiver now weakens.”