Congressional Democrats demand reversal of Russian oil sales into India as energy prices soar

Congressional Democrats are demanding that the Trump administration immediately reverse a sanctions waiver allowing Indian refiners to purchase Russian oil as the Iran war wreaks havoc on global energy markets.

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

The Treasury Department last week issued a temporary 30-day sanctions carveout to allow India to buy Russian oil, an effort to ease skyrocketing oil prices caused by the war and the traffic standstill at the Strait of Hormuz.

The oil surge comes less than eight months before the November midterm elections that could flip the House of Representatives and the Senate to Democratic control, and polls show voters are souring on President Donald Trump’s handling of the economy.

After the sanctions waiver was issued, however, it was reported that Russia is assisting Iran in targeting U.S. ships, aircraft, and bases in the region. Gallego and Liccardo warned in the letter against the temporary lifting of the sanctions, which rewards Russia with a windfall as it helps to target U.S. troops in the Middle East.

“Rather than performing the necessary contingency planning that would keep India and other allies supplied with alternative sources, the Administration’s hapless approach has allowed Russia and other adversaries to profit from oil reserves previously constrained by sanctions, supporting Russian efforts to harm U.S. troops and thwart U.S. intelligence,” Gallego and Liccardo wrote in their letter. “By providing this waiver, you have signaled that the United States will reward attacks on our troops, not deter them.”

About 20% of the world’s oil and gas moves through the Strait of Hormuz, which has been largely impassible since the beginning of the U.S. and Israeli assault on Tehran.

Oil prices have surged in the days since the war began. U.S. crude oil topped $108 per barrel on Sunday, as did the global benchmark Brent, which rapidly approached $110 a barrel. That’s caused U.S. gasoline prices to spike, jumping to $3.44 per gallon on Sunday, according to Gasbuddy.

The price spikes come as both parties seek to win over economically anxious voters ahead of the November midterm elections that will determine whether Democrats or Republicans control Congress for Trump’s final years in office. Trump promised to lower costs, including gas prices, during his 2024 campaign — but his approval on the economy has plummeted as voters express concern about affordability.

Liccardo and Gallego, who are members of the House Financial Services Committee and Senate Banking Committee, argue in their letter that the war is only making life less affordable for Americans.

“A prolonged conflict with Iran and wider military operations throughout the Middle East will only deepen the energy cost-crisis, burdening Americans to pay more at the pump, and exacerbating the affordability crisis facing too many Americans,” they wrote.

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

Energy Secretary Chris Wright defended the move to temporarily allow the sale of Russian oil into India, calling it a “pragmatic step” that diverts oil that eventually would be sold to China. He said it could help alleviate price spikes in the immediate term, until the U.S. achieves its military aims in Iran.

“We’re not helping Russia by just accelerating the sale of their oil to stop the rise of energy prices and keep European and Asian refineries in oil,” Wright said. “We’re just doing pragmatic things to get through a short period that’ll bring in an era of even lower energy prices.”

Pressed on the reports of Russian intelligence sharing, Wright said, “There have been rumors of that, we don’t know if that’s true or not.”

He added: “Russia is an expert at causing trouble around the world.”

Liccardo and Gallego asked Bessent whether he plans to continue offering waivers if the Strait of Hormuz remains closed. They also asked whether the Treasury Department had advance notice of the intelligence sharing between Russia and Iran, and whether there are any conditions that would cause the waiver to be revoked.

The pair also demanded information on any emergency oil price stabilization plans the administration had before launching the assault on Iran.

“The questions below address two distinct lines of accountability. The first concerns the specific waiver decision and its immediate consequences for sanctions integrity, energy markets, and troop safety,” they wrote of the questions. “The second concerns the administration’s planning failures prior to its unauthorized military action, and the absence of coordination with allies and partners, whose cooperation is essential to maintaining American sanctions architecture, which this waiver now undermines.”