U.S. Treasury Secretary Janet Yellen has signaled a potential further relaxation of sanctions on Russian crude oil, introducing new downward pressure on global oil markets. Analysts suggest that currently, 375 million barrels of sanctioned crude from Russia, Iran, and Venezuela are stranded at sea. Should these sanctions be lifted and the crude flow back into onshore pricing hubs, oil prices would face substantial impact.

On March 6, Reuters reported that Yellen, in an interview with Fox Business, stated, "We may lift sanctions on more Russian crude oil." She noted, "There are hundreds of millions of barrels of sanctioned crude at sea. Essentially, by lifting sanctions, the Treasury can create supply, and we are studying this issue."

These remarks came just one day after Washington issued a 30-day waiver—allowing Russian crude currently stranded at sea to continue being sold to India. According to Huanqiu.com, Yellen announced on March 5 that "to ensure the continued flow of crude into global markets," the U.S. Treasury would issue a temporary 30-day waiver permitting Indian refiners to purchase Russian crude.

Analysis from Goldman Sachs' commodities research team provides a quantitative framework for these policy signals. Goldman Sachs pointed out that every 100 million barrel reduction in floating crude storage—meaning incremental sanctioned crude reaching shore—would lower Brent crude prices by $3 to $4. This implies that if the "hundreds of millions of barrels" of sanctioned crude mentioned by Yellen are substantially released into the market, the resulting downward pressure on oil prices would be considerable.

**375 Million Barrels of Crude "Stranded at Sea" Act as a Hidden Support for Oil Prices**

Goldman Sachs' commodities research team noted in a previous report that, despite an approximate global oil supply surplus of 1.5 million barrels per day, Brent prices have not experienced a sustained decline this year. The core reason is that this surplus supply has not actually flowed into onshore pricing hubs.

The report indicated that floating storage of sanctioned crude from Russia, Iran, and Venezuela has increased by approximately 130 million barrels compared to the previous year, reaching a total of 375 million barrels. This accounts for one-third of the annual increase in global visible crude inventories. Meanwhile, onshore commercial inventories in OECD countries have remained largely stable.

Goldman Sachs analysts Daan Struyven, Filippo Cuscito, Alexandra Paulus, and Yulia Zhestkova Grigsby wrote in the report:

When inventory accumulation occurs offshore rather than on OECD land, its impact on oil prices is heavily discounted by the market. The reason is that spot-oriented oil markets tend to significantly discount expectations of future crude arrivals, especially when geopolitical factors could see sanctioned crude remain stranded at sea for years.

**Goldman Sachs Quantifies Price Impact of Sanction Easing: Every 100 Million Barrels Entering Market Lowers Prices by $3 to $4**

The Goldman Sachs report provided two rules of thumb for assessing the impact of sanction changes on oil prices, offering the market relatively clear pricing references.

First, assuming the global supply surplus remains unchanged, if 1 million barrels per day of sanctioned crude continues to accumulate offshore for 12 months (compared to a counterfactual where all that crude reaches land), Brent prices would receive a peak support of $8 per barrel.

Second, conversely, every 100 million barrel reduction in floating crude storage—meaning incremental sanctioned crude flowing into onshore markets—would lower Brent crude prices by $3 to $4.

This framework implies that if the "hundreds of millions of barrels" of sanctioned Russian crude mentioned by Yellen are approved for release and gradually arrive onshore, the cumulative downward pressure on oil prices could reach over $10 per barrel, with the exact magnitude depending on the scale of the release and the pace of arrivals.

**Mixed Demand-Side Signals, Path of Sanction Easing Remains Uncertain**

Despite Yellen's clear statements, whether the sanctioned crude can smoothly enter the market still depends on multiple demand-side variables.

The Goldman Sachs report noted that some industry experts expect India's purchases of Russian crude could decline from the current 1.3 million barrels per day to between 700,000 and 900,000 barrels per day, as India actively promotes diversification of its energy sources, shifting towards supplies from the U.S. and the Middle East.

India's Trade Minister Piyush Goyal stated in mid-February that buying crude oil or liquefied natural gas from the U.S. "is in India's own strategic interest."

Goldman Sachs also pointed out that if Russia-Ukraine negotiations fail to reach an agreement, pressure on Asian buyers to reduce purchases of Russian crude could increase.

In its baseline scenario, Goldman Sachs assumes that the proportion of floating crude storage in global inventory growth will decline from 47% in 2025 to 21% in 2026. However, progress in sanction easing or geopolitical negotiations could cause this proportion to deviate significantly from expectations, creating a two-way risk for oil prices.