US Treasury extends sanction waiver on Russian seaborne oil to aid vulnerable countries

PARIS: The U.S. Treasury will extend a sanctions waiver allowing purchases of Russian seaborne ‌oil for another 30 days to aid “energy-vulnerable” countries cut off from Gulf oil supplies, Treasury Secretary Scott Bessent said on Monday.

Bessent said the Treasury was issuing the 30-day general license after a previous waiver lapsed on Saturday. This will allow temporary access to Russian oil and petroleum ​products stranded on tankers without violating severe U.S. sanctions on Russian oil majors.

A source familiar with the ​decision had told Reuters that the second waiver extension was requested by poor and vulnerable ⁠countries that cannot get Gulf oil shipments due to the U.S.-Israeli war with Iran and the closure of the ​Strait of Hormuz.

“This extension will provide additional flexibility, and we will work with these nations to provide specific licenses as ​needed,” Bessent said in a social media posting on X.

“This general license will help stabilize the physical crude market and ensure oil reaches the most energy-vulnerable countries.”

Bessent said the measure would help reroute existing supply to countries most in need, allowing them to compete with ​China for previously sanctioned oil.

The action marks the second time the Treasury has allowed the sanctions waiver to lapse ​and subsequently extend it. The waiver was first issued in March in an attempt to ease oil supply shortages and mitigate price spikes ‌prompted by ⁠the U.S.-Israeli attacks on Iran by releasing sanctioned Russian oil and petroleum products stranded in tankers.

The waivers have done little to reduce oil prices, but have aided India, which was among the largest buyers of Russian oil prior to the U.S. issuing severe sanctions against Russian oil majors to put pressure on Moscow over its war in Ukraine.

On Monday, benchmark Brent oil ​futures prices rose about 1.5% ​to about $111 a barrel due ⁠to growing concerns of tight supply with the Strait of Hormuz still closed.

Crude fell earlier in the session on a report from an Iranian news agency that the U.S. ​was considering temporarily lifting sanctions on Iranian oil during peace talks, but CNBC later reported that ​that report was ⁠false, citing a U.S. official. Reuters has not independently verified that report.

Bessent, who is in Paris for a Group of Seven finance leaders meeting, said that he wanted G7 and other allies to enforce Iran sanctions more strongly.

“We call upon all ⁠our G7 ​and indeed all of our allies and the rest of the world ​to follow the sanctions regime, so that we can crack down on the illicit finance that is fueling the Iranian war machine and give this ​money back to the Iranian people,” Bessent told reporters.