The United States has announced another 30-day extension of a sanctions waiver that permits purchases of Russian seaborne oil, aiming to assist "energy-vulnerable" countries affected by the Iran conflict. This move reverses earlier plans not to grant an extension, as supply concerns keep Brent crude oil prices above $110 per barrel.
Treasury Issues General License
Treasury Secretary Scott Bessent stated that the Treasury is issuing the 30-day general license after a previous waiver lapsed on Saturday. This license will temporarily allow access to Russian oil and petroleum products stranded on tankers without violating severe US sanctions on Russian oil majors. "This general license will help stabilize the physical crude market and ensure oil reaches the most energy-vulnerable countries," Bessent said.
Democratic Backlash
Two senior Democratic senators, Jeanne Shaheen of New Hampshire and Elizabeth Warren of Massachusetts, criticized the move as an "indefensible gift" to Russian President Vladimir Putin. "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 argued that the sanctions relief is not lowering gasoline prices at home or stabilizing global energy markets.
Context and Impact
The Trump administration previously imposed sanctions on Russian oil majors Rosneft and Lukoil to pressure Russia to end its war in Ukraine by depriving it of vital oil revenues. However, after US-Israeli attacks on Iran drove up global oil prices, the Treasury first issued the temporary license in March to ease supply shortages and mitigate price spikes. The waivers do not apply to oil currently being pumped by Russia.
Analysts suggest that while the short-term waivers may help some individual countries dependent on Gulf oil supplies, they are unlikely to significantly reduce US gasoline prices. "It is not yet clear whether these short-term authorizations have had any meaningful impact on U.S. gasoline prices," said Stephanie Connor, a former policy director at the Treasury's Office of Foreign Assets Control. She added that British and European sanctions on Russian oil purchases remain in place.
Under the waiver, purchases are limited to Russian crude and petroleum products loaded on vessels as of 17 April, restricting the volume of sales and excluding more recently loaded Russian oil.
Charles Lichfield, deputy director of the Atlantic Council's GeoEconomics Center, noted that the waivers would boost Russia's oil revenues, already bolstered by higher prices, while offsetting the impact of increased Ukrainian strikes on Russian oil refineries. "Given the information coming out of the Russian economy that looks bad, this might be the time to really hit them with sanctions," Lichfield said. "But I don't see that the administration has come to that conclusion."
On Monday, benchmark Brent oil futures prices rose about 2.6% to close above $112 per barrel due to growing supply concerns. Bessent, attending a Group of Seven finance leaders meeting in Paris, called for stronger enforcement of Iran sanctions by G7 and other allies.
