U.S. lets Russia oil waiver lapse

The U.S. Treasury allowed a temporary sanctions waiver for some Russian seaborne oil cargoes to expire on May 16, closing a short-lived channel that had permitted delivery and sale of shipments already loaded onto tankers. The lapse ends a carve-out the Trump administration had first opened in March and then extended in April as oil markets tightened after Iran’s closure of the Strait of Hormuz. Treasury Secretary Scott Bessent had said previously he would not renew the license, and no renewal notice had appeared on Treasury’s website by Saturday afternoon in Washington. The waiver did not authorize new Russian exports broadly. It applied to crude oil and petroleum products of Russian origin that had already been loaded on vessels by a specified cutoff date, allowing the transactions needed to complete delivery, offloading and related voyage services. Bloomberg reported that the expiration ends, for now, a brief period in which Washington eased sanctions on some Russian oil even as the Iran war raised concern about global supply and fuel costs. (usnews.com) ### Which waiver expired, and what exactly did it cover? OFAC issued General License 134B on April 17, 2026, authorizing transactions “ordinarily incident and necessary” to the sale, delivery or offloading of Russian-origin crude oil and petroleum products loaded onto vessels on or before April 17. The license remained in effect through 12:01 a.m. EDT on May 16, 2026, according to Treasury and sanctions lawyers who reviewed the measure. (ofac.treasury.gov) General License 134B replaced an earlier waiver, General License 134, that had applied to cargoes loaded by March 12 and was effective through April 11. Before that, OFAC issued General License 133 on March 5 for India-specific transactions involving Russian cargoes already at sea. (ofac.treasury.gov) ### Why had Washington opened this narrow window in the first place? March 5 marked Treasury’s first formal step, with General License 133 authorizing delivery and sale of Russian crude and petroleum products loaded on vessels as of that date to India. A Baker McKenzie sanctions note said Treasury then broadened the authorization on March 12 beyond India to apply globally under General License 134. (sanctionsnews.bakermckenzie.com) Reuters reported the administration extended the waiver for one month after supply shortages and higher prices followed Iran’s closure of the Strait of Hormuz. Reuters also said the broader energy response included loans from the Strategic Petroleum Reserve, a temporary Jones Act shipping waiver and Trump’s stated support for pausing the 18.4-cent-a-gallon federal gasoline tax. (ofac.treasury.gov) ### Who was using the waiver most? India was the main named buyer in the Treasury documents and Reuters reporting. General License 133 explicitly covered sales to India, and Reuters said India is the top consumer of Russian seaborne crude and that its purchases were near record highs in April and May after the earlier waivers. Bloomberg reported that countries including India and Indonesia had sought more time as the market remained tight. (usnews.com) The waiver, however, was limited to cargoes already loaded onto vessels and did not amount to a blanket reopening of Russian oil trade. (ofac.treasury.gov) ### Why let it lapse now despite high prices? Scott Bessent had previously said he would not renew the general license, Reuters reported. Two Democratic senators, Jeanne Shaheen and Elizabeth Warren, urged the administration on May 15 not to extend the waiver, saying it was providing revenue to Russia for its war in Ukraine and arguing there was no evidence it was lowering fuel costs for U.S. consumers. (economictimes.indiatimes.com) U.S. gasoline prices were about $4.50 a gallon, Reuters reported, the highest since 2022, while domestic and international oil prices had hovered around or above $100 a barrel since the war began on February 28. Those prices formed the backdrop to the administration’s decision to let the license expire anyway. (usnews.com) ### What should readers watch next? Saturday afternoon in Washington was the immediate marker: Reuters said Treasury had posted no renewal notice by then, and a spokesperson declined further comment. The clearest next signal will be any new OFAC general license or Treasury notice on the agency’s recent-actions page. (usnews.com) President Donald Trump said on Friday, returning from Beijing, that he had discussed with Chinese President Xi Jinping the possibility of lifting sanctions on Chinese companies that buy Iranian oil and would decide soon, Reuters reported. Any move on Iranian oil sanctions, together with the next OFAC posting, will shape the next phase of Washington’s energy sanctions policy. (usnews.com)