US Treasury allows sanctions waiver on Russia’s seaborne oil to lapse
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The waiver was aimed at easing oil supply shortages and high prices due to Iran’s closure of the Strait of Hormuz.
PHOTO: REUTERS
- The Trump administration let a sanctions waiver for Russian seaborne oil purchases lapse on May 16, impacting buyers like India.
- The waiver's non-renewal, despite prior efforts to ease Iran War price spikes, faced senator opposition over aiding Russia's war in Ukraine.
- US gasoline prices reached US$4.50 a gallon, highest since 2022, despite previous efforts to control energy costs, with oil above US$100.
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WASHINGTON - The Trump administration on May 16 allowed a sanctions waiver to lapse that had previously allowed countries including India to buy Russian seaborne oil after a month-long extension aimed at easing oil supply shortages and high prices due to Iran’s closure of the Strait of Hormuz.
US Treasury Secretary Scott Bessent had previously said he would not renew the general licence allowing the purchase of Russian oil stored on tankers.
As of early afternoon Washington time on May 16, no renewal notice had been posted on the Treasury website. A Treasury spokesperson declined further comment.
Two top Democratic US senators - Ms Jeanne Shaheen and Ms Elizabeth Warren - on May 15 urged the Trump administration against renewing the waiver, arguing that it was providing revenue to Russia to aid its war in Ukraine, while there was no evidence it was bringing down fuel costs for American consumers.
The prior extension was part of the Trump administration’s effort to control global energy prices that have shot higher during the Iran war, including loans from the Strategic Petroleum Reserve and a temporary waiver of a shipping rule known as the Jones Act. In addition, President Donald Trump has said he supported pausing the 18.4-cent-a-gallon federal tax on gasoline.
The moves have done little to calm US gasoline prices, which are currently at about US$4.50 (S$5.55) a gallon, the highest since 2022. Both domestic and international oil prices have hovered around or above US$100 per barrel since the war began on Feb 28.
Mr Trump told reporters on May 15 returning from Beijing that he had discussed with Chinese President Xi Jinping possibly lifting sanctions on Chinese companies that buy Iranian oil and will make a decision soon.
India is the top consumer of Russian seaborne crude, and its purchases have been near record highs in April and May following previous sanctions waivers. REUTERS
