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The United States will not be renewing its expiring sanctions waivers for Iranian and Russian oil, the Trump administration has made it clear.
Washington is also threatening to punish countries that continue to buy oil from the Islamic Republic and hoping that China will halt purchases, too.
U.S. won’t renew waivers for Iranian and Russian oil
The United States will not be extending the waivers on sanctions for oil originating from Iran and Russia, Treasury Secretary Scott Bessent announced. Speaking to media on Wednesday, he stated:
“We will not be renewing the general license on Russian oil, and we will not be renewing the general license on Iranian oil.”
“That was oil that was on the water prior to March 11. So all that has been used,” Bessent noted during a press briefing at the White House.
The decision signals an end to efforts by the Trump administration to free up oil supplies amid soaring energy prices, Reuters remarked in a report quoting Bessent.
Oil prices spiked after the U.S. and Israel launched joint strikes on Iran at the end of February, exceeding $100 per barrel of the benchmark Brent crude.
They are now below that threshold, amid statements indicating talks to end the conflict will continue despite failing to produce an agreement last weekend.
The waivers Bessent was referring to concerned oil that was already in transit and could quickly reach global markets to boost supply and ease pressure on prices.
The U.S. first allowed India to buy Russian oil and petroleum products stranded at sea in early March. Then it permitted other countries to do the same with oil already loaded on tankers as of March 12.
The broader waiver was initially valid until April 11. On March 19, the Treasury’s Office of Foreign Assets Control (OFAC) issued a new license, adding some restrictions, which expires on April 19.
While Bessent insisted the “narrowly tailored, short-term measure” will not significantly benefit Moscow, Russia’s revenues from oil exports have been growing.
The 30-day Iranian waiver, which was published on March 20 and is also set to expire at the end of this week, helped release about 140 million barrels of oil, according to his estimates.
Bessent vows to sanction buyers of Iranian oil
The U.S. is now also threatening to sanction those who buy oil from Iran and expressing confidence that China will suspend purchases. Scott Bessent revealed:
“We have told countries that if you are buying Iranian oil, that if Iranian money is sitting in your banks, we are now willing to apply secondary sanctions.”
The warning comes as the United States is enforcing a maritime blockade on the Islamic Republic, which was imposed at the start of the week, the seventh since the beginning of the war.
“We believe [that with] this blockade … there will be a pause of Chinese buying,” Bessent stated. The People’s Republic used to purchase over 80% of the oil shipped by Iran.
The U.S. Treasury has already informed two Chinese banks about the consequences of processing Iranian money flows.
The department has also contacted Hong Kong, the UAE and Oman to identify financial institutions allowing Iranian activities.
Besides the current blockade, the U.S. sanctioned more than two dozen individuals, companies and vessels involved in the transportation of Iranian oil.
The measures are part of American pressure on Tehran over its nuclear program and support for militant groups across the region.
The conflict in the Middle East is already affecting the global economy. The European Bank for Reconstruction and Development (EBRD) recently warned that if the war drags on, it will cut growth buy 0.4% and bump inflation by 1.5% in the countries where it’s active.
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