The U.S. Treasury on Friday renewed a waiver that allows certain countries to buy Russian oil and petroleum products that were loaded on vessels as of the day of the announcement, extending the permission through May 16. The move replaces a 30-day waiver that had expired on April 11 and continues to bar transactions involving Iran, Cuba and North Korea.
Officials described the extension as part of an effort to moderate sharp increases in global energy prices that have followed the recent U.S.-Israeli conflict with Iran. The administration said Treasury wanted to ensure oil supplies were available to nations facing acute needs as negotiations with Iran intensified.
The decision came after countries in Asia, which have been hit by the global energy shock, asked Washington to let alternative supplies enter markets. A U.S. source said those requests were made on the sidelines of meetings this week attended by Group of 20, World Bank and International Monetary Fund delegations in Washington.
Two days earlier, Treasury Secretary Scott Bessent had stated Washington would not renew the waiver on Russian oil and a separate waiver for Iranian oil that was due to expire on Sunday. The reversal underscores the pressure Washington confronted from partner governments seeking relief from elevated energy costs.
Global prices dropped sharply on Friday, falling about 9% to near $90 a barrel after Iran temporarily reopened the Strait of Hormuz, a critical passage for oil shipments from the Gulf. Still, the International Energy Agency has described the ongoing conflict as creating the worst global energy supply disruption in history.
The conflict, now approaching its eighth week, has damaged more than 80 oil and gas facilities in the Middle East. Iranian officials have warned the strait could be closed again if a recent U.S. Navy blockade of Iranian ports were to continue, a development that adds to regional volatility and shipping risks.
High crude prices are viewed as a political risk for President Donald Trump’s party ahead of the November midterm elections, and the president has faced pressure from partner countries to address oil-market strains. Officials said Washington discussed oil matters this week in a call between the president and Indian Prime Minister Narendra Modi. India is noted in public reporting as a significant purchaser of Russian oil.
Treasury previously issued a waiver on Iranian oil on March 20. Treasury Secretary Bessent said last month that waiver had enabled approximately 140 million barrels to enter global markets, easing some pressure on energy supply. The recent renewal of the Russian oil waiver was described by a Russian presidential envoy as evidence that U.S.-Russian economic and energy cooperation would continue.
Critics in the U.S. Congress from both political parties condemned the waivers, arguing they risk supporting the economies of countries at odds with the United States - specifically Iran, which has been in conflict with the U.S., and Russia, which is engaged in war in Ukraine. Lawmakers said the waivers could hinder Western efforts to cut off revenue streams that support Russia’s military operations.
European officials also signaled resistance to easing sanctions. European Commission leadership has said loosening measures against Russia is inappropriate at this time.
Analysts and sanctions experts warned that Friday’s renewal may not be the last. One sanctions specialist said the conflict has inflicted lasting damage on global energy markets and that the inventory of tools available to stabilize supply is nearly exhausted.
Russian officials had earlier estimated that an initial waiver would free about 100 million barrels of crude, a volume described as roughly equivalent to almost a day’s worth of global oil output. The exact effects of the latest extension on market balances and long-term sanction regimes remain tied to developments in the conflict, diplomatic negotiations and demand from countries pressing for access to alternative supplies.
Summary
The U.S. Treasury extended a waiver through May 16 permitting purchases of Russian oil loaded at sea, replacing a 30-day waiver that expired April 11. The extension, which excludes transactions with Iran, Cuba and North Korea, aims to alleviate global energy price pressures tied to the U.S.-Israeli conflict with Iran and follows appeals from Asian buyers and diplomatic discussions. The renewal drew criticism from U.S. lawmakers and some European officials who warned it could undercut sanctions goals.
Key points
- The waiver permits purchases of Russian oil loaded on vessels as of the announcement date through May 16 and replaces a 30-day waiver that expired April 11.
- Washington said the move was intended to keep oil flowing amid a severe energy shock linked to the U.S.-Israeli conflict with Iran; Asian countries pressed for relief at recent international meetings.
- Sectors directly affected include global energy markets, maritime oil shipping, and regional geopolitics which influence pricing and supply chains.
Risks and uncertainties
- Sanctions and political backlash - Lawmakers from both parties warned waivers could blunt efforts to deprive Russia of revenue for its war in Ukraine, risking tension with allies and complicating sanction strategies. This impacts financial markets and defense-related economic policy.
- Continued supply disruption - Damage to more than 80 oil and gas facilities and the possibility of renewed closure of the Strait of Hormuz create ongoing risks for oil shipments and energy prices, affecting refining, shipping, and energy-intensive industries.
- Limited policy tools - Analysts say the conflict has caused lasting damage to energy markets and that mechanisms to stabilize supply may be nearly exhausted, leaving markets vulnerable to further shocks. This poses uncertainty for commodity traders and national energy planners.