The United States has once again exempted the sale of Russian oil and petroleum products from sanctions. The new license will remain in effect until May 16, according to a report from the U.S. Department of the Treasury (OFAC). This authorization applies to energy carriers loaded onto tankers before April 17.
“As negotiations with Iran intensify, the Treasury Department wants to ensure oil availability for those who need it,” a department representative told Reuters. This extension comes as a surprise, as the previous license expired on April 11, after which Treasury Secretary Scott Bessent had assured that the U.S. would not seek an extension.
The initial lifting of restrictions on Russian seaborne oil export occurred on March 13. The cause was an energy crisis that emerged following the start of U.S. and Israeli military operations against Iran on February 28. The hostilities led to a blockade of the Strait of Hormuz, which facilitates 20% of global maritime oil exports, and affected Persian Gulf nations, including major market players like Saudi Arabia and Qatar. All this triggered massive supply disruptions and a sharp spike in prices. Bessent called the forced easing of sanctions a “narrowly targeted and short-term” measure, insisting it would not result in significant benefits for the Russian budget.
Analytical Summary:
The extension of the U.S. license until May 16 is a forced admission by Washington that the global economy cannot survive a collapse in the Persian Gulf without Russian oil. Despite Scott Bessent’s tough rhetoric, the reality of a depleted market and skyrocketing gas prices within the U.S. proved stronger than sanctioning ambitions. The White House has fallen into an “energy trap”: while attempting to pressure Iran, it is simultaneously forced to sustain Moscow’s foreign exchange earnings.
Bessent’s claims that the measure is “narrowly targeted” and won’t yield significant benefits to the Russian budget appear to be an attempt to save face. In practice, legalizing shipments loaded before April 17 allows Russian companies to offload accumulated tankers at high global prices. Furthermore, the uncertainty in the Strait of Hormuz makes Russian grades (particularly Urals and ESPO) critically important for refineries in Europe and Asia that have lost access to Arabian crude.
The primary risk for the U.S. lies in creating a precedent of “sanction flexibility.” The market now observes that when critical price thresholds are reached, Washington is willing to retreat from its own restrictions. In the long term, this diminishes the effectiveness of sanction pressure, as buyers and insurers begin to incorporate the possibility of new “temporary licenses” into their strategies during any major geopolitical escalation.