US extends sanctions waiver on Russian oil to aid vulnerable countries

The United States has extended for another 30 days a sanctions waiver allowing purchases of Russian seaborne oil to support energy-vulnerable countries affected by the ongoing Iran conflict and the closure of the Strait of Hormuz.

U.S. Treasury Secretary Scott Bessent announced the extension on Monday, reversing earlier plans not to renew the waiver. The temporary license permits access to Russian oil and petroleum products stranded on tankers without violating U.S. sanctions imposed on major Russian oil companies.

According to Bessent, the extension is intended to stabilize global oil markets and ensure energy supplies reach poorer countries struggling to secure Gulf oil shipments due to disruptions caused by the U.S.-Israeli war with Iran.

“This general license will help stabilize the physical crude market and ensure oil reaches the most energy-vulnerable countries,” Bessent said in a post on X.

A source familiar with the matter told Reuters that several vulnerable nations requested the waiver extension after supply routes through the Strait of Hormuz were disrupted during the conflict.

The move marks the second time the U.S. Treasury allowed the waiver to expire before later renewing it. Last month, Bessent had said no further extensions were planned.

The decision drew criticism from Democratic senators Jeanne Shaheen and Elizabeth Warren, who described the waiver as an “indefensible gift” to Russian President Vladimir Putin.

The senators argued that the waiver provides additional revenue to the Kremlin amid Russia’s ongoing war in Ukraine, while failing to significantly lower gasoline prices in the United States or stabilize global energy markets.

The sanctions on Russian oil companies Rosneft and Lukoil were imposed by the Trump administration last year to pressure Moscow by restricting its oil revenues.

Following the escalation of the Iran conflict, however, global oil prices surged, prompting the Treasury in March to issue temporary waivers aimed at easing supply shortages. The waivers only apply to Russian oil already loaded onto vessels before April 17 and do not cover newly pumped Russian oil.

Energy analysts said the short-term waivers may provide limited relief for countries dependent on Gulf oil but are unlikely to significantly reduce U.S. fuel prices.

Meanwhile, Brent crude oil futures rose about 2.6% on Monday, closing above $112 per barrel as concerns over tight global supply persisted with the Strait of Hormuz still closed.

Bessent, currently attending the Group of Seven finance leaders meeting in Paris, also called on G7 allies to strengthen enforcement of sanctions against Iran, saying tougher measures are needed to cut off funding for Tehran’s military activities. -Reporting by David Lawder in Paris; additional reporting by Andrea Shalal and Timothy Gardner in Washington; Writing by David Lawder and Makini Brice; Editing by Aidan Lewis and Mark Porter/Reuters