The US Treasury Department issued a new license Friday exempting Russian oil sales loaded onto tankers from sanctions for one month, reversing earlier statements.
US Reverses Course on Russian Oil Sanctions
The US has lifted additional sanctions on Russian oil, a move previously stated would not occur. The American Treasury Department released a new license on Friday, exempting the sale of Russian oil loaded onto tankers from sanctions for a period of one month.
The document, published on the Office of Foreign Assets Control (OFAC) website, pertains to transactions related to the purchase of Russian oil loaded onto ships before April 17th. The exemption is valid until May 16th.
Second Sanctions Waiver Since Start of War
This marks the second instance of the US easing sanctions on Russian oil since the start of the war. A previous license expired on April 11th. Just Wednesday, the Treasury Secretary announced during a White House briefing that licenses allowing the sale of both Russian and Iranian oil would not be extended.
A similar exemption for Iranian oil remains in effect until April 19th. No justification for the decision has been provided, and the Treasury Department has not responded to inquiries from the Polish Press Agency (PAP).
Rationale and Volume of Oil Affected
The initial license issuance was previously explained as an attempt to lower oil prices amid a blockade of the Strait of Hormuz, with the assertion that Russia would not significantly benefit due to the temporary nature of the exemption. Kirill Dmitriev, a special envoy for Russian President Vladimir Putin, stated on Telegram Saturday that the US decision will affect over 100 million barrels of oil currently “en route” by tanker.
Financial Gains for Russia
According to estimates by Senate Democrats, Russia has earned an additional $150 million per day from oil trade due to the US actions and sanctions waivers, totaling over $4 billion to date. Over 140 million barrels of Russian oil were loaded onto ships when the first license was issued in March.
Impact on Global Oil Prices
The move does not appear to have significantly impacted global crude oil prices. The new license was issued after oil prices fell sharply on Friday, by around 10%, following Iran’s announcement of reopening the Strait of Hormuz and statements by Trump regarding an impending agreement with Iran. Brent crude oil fell 9% on Friday to around $90 per barrel.
Exclusions and Previous Waivers
Like the previous exemption, this one does not apply to sales of oil to entities in Iran, North Korea, Cuba, or regions of Ukraine occupied by Russia. However, during the previous license period, the US allowed Russian oil to be delivered to Cuba, citing humanitarian reasons despite the economic blockade.
