(Bloomberg) — The Trump administration allowed a waiver that encouraged more Russian crude sales to lapse, even as the Iran war stokes concerns about global oil supplies and higher fuel costs.
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The expiration effectively ends for now a brief period where the administration eased sanctions on some Russian oil, enabling purchases that would otherwise be barred. The Trump administration issued an initial waiver in March and a second after the first expired in April — both applying only to a subset of Russian oil that had already been loaded onto tankers.
The waivers have been controversial, especially with European allies who see sanctions as essential to starving Russia of crude revenue and depriving Moscow funding for its war in Ukraine. Critics say the sanctions relief has served to enrich Moscow — even though it’s been limited to waterborne oil — especially as crude prices surge.
But some countries, including India and Indonesia, had lobbied the Trump administration for extended sanctions waivers, as the Iran war and the near-closure of the Strait of Hormuz deprive global markets of millions of barrels of crude daily.
The Trump administration has also pivoted on the issue, responding to entreaties from countries heavily reliant on crude imports. Treasury Secretary Scott Bessent in April initially said the US would not renew the sanctions waiver allowing purchases of some Russian crude before ultimately issuing a new authorization two days later.
He told a Senate panel the shift came after “more than 10 of the most vulnerable and poorest countries in terms of energy” approached him seeking an extension. Bessent has called the previous moves necessary to promote stability in global energy markets amid the Middle East conflict.
Just as in April, lobbying from Asian allies and more tightness in the oil market could still prompt the administration to to issue a new waiver later.
The administration allowed a separate temporary waiver enabling purchases of some Iranian crude to expire in April.
Brent crude, the global benchmark, has surged since the Iran war began, driving higher prices for gasoline, diesel and other products made from it. Supply disruptions tied to Hormuz also have sent some buyers scrambling for new cargoes, including from the US.