On Friday, the Trump administration extended a waiver that permits nations to purchase sanctioned Russian oil at sea for roughly a month, despite accusations from lawmakers that the government is being kind toward Moscow as its conflict with Ukraine continues.
As of Friday through May 16, the Treasury Department’s waiver permits nations to buy Russian oil and petroleum products loaded aboard ships. It replaces a 30 day waiver that ended on April 11 and does not apply to transactions with North Korea, Cuba, or Iran. The action is a part of the administration’s attempt to rein in the world’s energy prices, which have skyrocketed due to the US-Israeli war on Iran. It followed pressure on Washington to provide alternative supplies to reach markets from Asian nations affected by the global energy crisis.
Reverse Move By Treasury
“As negotiations (with Iran) accelerate, Treasury wants to ensure oil is available to those who need it,” a Treasury Department spokesperson said. Just two days earlier, Treasury Secretary Scott Bessent said Washington would not be renewing the waiver for Russian oil and another for Iranian oil, which is set to expire on Sunday.
Following Iran’s temporary reopening of the Strait of Hormuz, a Gulf oil choke point, global oil prices fell 9% on Friday to roughly $90 per barrel. However, according to the International Energy Agency, the conflict has already caused the greatest disruption to the world’s energy supply in history. More than 80 Middle Eastern oil and gas installations have been destroyed by the conflict, which will begin its eighth week on Saturday. Tehran has threatened to close the strait once more if the recent US Navy blockade of Iranian ports persists. Ahead of the midterm elections in November, President Donald Trump’s fellow Republicans face a danger from rising gasoline costs.
US Renews Waiver Allowing Sale Of Sanctioned Russian Oil: What Changes For India?
Trump has also faced pressure from partner countries on the oil price. A US source said partner countries on the sidelines of Group of 20, World Bank and International Monetary Fund meetings in Washington this week had requested the US extend the waiver. And he spoke about oil this week in a call with Prime Minister Narendra Modi of India, a big purchaser of Russian oil. The waiver on Iranian oil, which the Treasury Department issued on March 20, allowed some 140 million barrels of oil to reach global markets and helped relieve pressure on energy supply, Bessent said last month.
Lasting Damage
US lawmakers from both political parties had slammed the administration over the sanctions waivers, saying they stood to help the economy of Iran while it was at war with the U.S. and of Russia as it was at war with Ukraine. The waivers could impede the West’s efforts to deprive Russia of revenue for its war in Ukraine and put Washington at odds with its allies. European Commission President Ursula von der Leyen has said now is not the time to relax sanctions against Russia.
Russian presidential envoy Kirill Dmitriev said in a social media post about the renewal of the waiver: ‘US-Russian economic and energy cooperation will continue.’ He had said the first waiver on Russian oil would free 100 million barrels of crude, equal to almost a day’s worth of global output. Brett Erickson, a sanctions expert at the consulting firm Obsidian Risk Advisors, said Friday’s renewal is likely not the last waiver Washington will issue. “The conflict has done lasting damage to global energy markets, and the tools available to stabilize them are nearly exhausted,” Erickson said.
(With Inputs From Reuters)
