The United States has announced another 30-day extension of a sanctions waiver for countries buying Russian oil and petroleum products currently already loaded on tankers at sea, as global energy markets have been roiled by the US-Israel war on Iran.

In a post on X on Monday, Treasury Secretary Scott Bessent announced that the US would issue the extension “to provide the most vulnerable nations with the ability to temporarily access Russian oil currently stranded at sea”. It will last until June 17.

“This extension will provide additional flexibility, and we will work with these nations to provide specific licenses as needed. This general license will help stabilize the physical crude market and ensure oil reaches the most energy-vulnerable countries,” he wrote.

“It will also help reroute existing supply to countries most in need by reducing China’s ability to stockpile discounted oil,” he added.

The US issued its first 30-day sanctions waiver for Russian oil and petroleum products in March in a bid to stabilise global energy markets after crude oil prices surged above $100 per barrel in the wake of US-Israeli strikes on Iran. In April, Bessent told The Associated Press news agency that Washington had no plans to renew the waiver.

But energy markets have failed to stabilise amid ongoing negotiations for a peace proposal between the US and Iran, as well as the closure of the Strait of Hormuz, a vital waterway through which about 20 percent of global oil and gas is shipped during peacetime, and the US naval blockade of Iranian ports. The closure of the strait, which is the only sea route from the Gulf to the open ocean, has “walled in” 20 million barrels of Gulf oil per day, George Voloshin, an independent energy analyst based in Paris, told Al Jazeera in March.

Furthermore, European sanctions on Russian oil – imposed since the start of the 2022 invasion of Ukraine – remain in place.

Will the US waiver extension help stabilise the energy market? What does this mean for Russia? Here’s what we know:

How much Russian oil is at sea?

According to analytics firm Kpler, there is currently about 113 million barrels of oil or liquid volume (Mbbl) of Russian crude and condensate loaded on ships and at sea. Russian crude oil in transit is approximately 106Mbbls.

Johannes Rauball, a senior crude analyst at Kpler, told Al Jazeera that floating storage of Russian crude – oil held on stationary tankers awaiting buyers or further shipping instructions – has declined significantly since the start of the year from a high of about 19Mbbls in late January to 7Mbbls now.

“In recent months, Russian crude exports have been pressured by ongoing Ukrainian drone strikes, which have disrupted export infrastructure and reduced shipping capacity,” he said. As a result, Russian crude production has averaged roughly 9.1 million barrels per day (bpd), below its OPEC+ quota of approximately 9.5 million bpd, he added.

Who is buying Russian oil?

Despite these challenges, Moscow has continued to export oil, with India and China as consistent purchasers. This is despite US President Donald Trump claiming to have extracted a promise from Indian Prime Minister Narendra Modi to stop buying Russian oil in October last year. Moscow exported 1.62 million bpd of crude to India in September, roughly one-third of the country’s oil imports.

However, last month, Kpler noted, Russian oil exports to India stood at more than 2 million bpd compared with 1.72 million bpd the month before. Exports to China dropped a little from 1.3 million bpd, but remained strong at 1.05 million bpd.

On Monday, Sujata Sharma, joint secretary at India’s Ministry of Petroleum and Natural Gas, told reporters that New Delhi had been buying Russian oil before Washington’s waiver on the sanctioned oil. “Regarding the American waiver on Russia, I would like to emphasise that we have been purchasing from Russia earlier … before waiver also, during waiver also and now also,” she said.

She stressed that India does not face an oil shortage.

“Waiver or no waiver, it will not affect our supplies, and all efforts have been taken to that effect,” Sharma said.

In a May 18 briefing note, Kpler analyst Sumit Ritolia wrote that it is difficult to see India materially stepping back from Russian crude even if sanctions are reimposed.

“The issue is increasingly about supply security and economics rather than sanctions optics … With Middle Eastern flows still facing logistical uncertainty, Russian crude continues to offer advantages through pricing and relatively stable non-SoH (stock on hand) logistics,” he wrote.

With the sanctions waiver now extended, Anna Zhminko, market analyst at maritime analytics company Vortexa, told Al Jazeera that Russian oil exports to other countries are also likely to grow.

“We could see some occasional arrivals of Russian crude to other Asian countries, for example, Brunei, Indonesia, Philippines, but ultimately India and China will remain the largest buyers of Russian oil even under the waiver,” she said.

What do the sanction waivers mean for Russia?

When the first US sanction waiver came into place in March, there was a scramble at sea for Russian oil cargoes. That month, Bloomberg reported that at least seven tankers carrying Russian oil had changed course mid-voyage from China to India, citing data from Vortexa, the data analytics group.

Then, Indian media quoted Rakesh Kumar Sinha, special secretary in the Ministry of Ports, Shipping and Waterways, confirming that the Aqua Titan, a Russian oil-laden tanker originally destined for China, was expected to arrive at New Mangalore Port on March 21, having been chartered by Mangalore Refinery and Petrochemicals Limited (MPCL).

This redirection of oil from China to India, which had been preparing last year to buy less Russian oil under pressure from the Trump administration, works in Moscow’s favour, Zhminko said, as it means it can do more trade over a shorter distance.

“Before the Middle East conflict, India tried to diversify away from Russian oil. Thereby, we saw a build in oil on water and larger volumes going to China,” she explained. “But going from Russia to China vs India is significantly longer, which complicated their logistics.”

Russia has not directly commented on Bessant’s latest announcement, but in March, when the first waiver was announced, Kremlin spokesman Dmitry Peskov said the Trump administration’s move was aimed at stabilising world energy markets.

“In this respect, our interests coincide,” he said.

However, Ukraine and European allies have criticised Washington’s decision, saying the waivers are helping Russia’s economy by boosting oil revenues.

On Monday, after the Trump administration’s recent announcement, US Senators Jeanne Shaheen (New Hampshire) and Elizabeth Warren (Massachusetts) blasted the move as an “indefensible gift” to Russian President Vladimir Putin, the Reuters news agency reported.

“Every additional dollar the Kremlin earns from this license helps Putin finance his illegal war against Ukraine and kill innocent Ukrainians,” they said in a statement. They added that the US sanctions relief was also not driving down petrol prices at home or stabilising global energy markets.

According to the International Energy Agency, in April, Russia’s overall crude exports increased by 250,000bpd, reaching 4.9 million bpd. Since the war on Iran began, the price of Brent crude – the global benchmark – has soared from $66 per barrel to well above $100. On Tuesday, it was trading at about $110.

Russian Urals crude, by comparison, is trading at between $97 and $100 per barrel – up from a pre-war price of below $60. A price of $100 per barrel means Russia is earning $490m per day just from oil sales despite sanctions. It is important to note that this is an average price – actual sale prices vary from country to country.

Will crude oil prices fall?

On Monday, benchmark Brent prices rose about 2.6 percent to close above $112 per barrel amid fears of the US renewing attacks on Iran. But on Tuesday morning, they fell back to about $110 per barrel after Trump announced that a planned attack on Iran had been paused.

Zhminko noted that since there is no sign of easing of constraints on shipping via the Strait of Hormuz, prolonging the sanctions waiver might alleviate some pressure on the spot market.

“But price support is as limited as access to Russian oil is – not all buyers will opt for such cargoes even with the waiver due to other challenges – payment, vessel clearance procedures, no change to EU and UK regulations,” she said.

Hamad Hussain, a climate and commodities economist at the United Kingdom-based firm Capital Economics, told Al Jazeera that while the extension of the US waiver on Russian sanctions is an attempt to improve supply and limit the pressure on oil prices, the impact of the waiver on prices will be limited, given that it only applies to oil already loaded on ships before mid-April.

“As a result, oil produced in the past month by Russia would remain under sanctions, which means that the additional amount of non-sanctioned oil that can be purchased is probably small,” he said.

“In any case, the extent of lost supply from the Middle East far outweighs the amount of Russian barrels stranded at sea. So, oil prices are likely to continue rising for as long as traffic through the Strait of Hormuz remains disrupted,” he added.