The Trump administration has once again extended a sanctions waiver allowing the purchase of seaborne Russian oil, this time carving out the exemption for the “most energy-vulnerable” countries as the war in Iran continues to choke global flows of crude.
Treasury Secretary Scott Bessent confirmed Monday that the United States would issue a 30-day general license allowing the purchase of Russian oil, just two days after the administration let its previous waiver expire.
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In March, shortly after the Iran war began, the Trump administration first issued a waiver allowing the purchase of seaborne Russian crude in an effort to stave off surging energy prices caused by the closure of the Strait of Hormuz.
The waiver was extended in April, and officials, including Bessent, indicated that it would not be renewed.
A source familiar with the decision to extend the waiver told Reuters that the second extension was required by poor and vulnerable nations that have been unable to receive any shipments of crude from the Persian Gulf as the Strait of Hormuz remains effectively shut.
“This extension will provide additional flexibility, and we will work with these nations to provide specific licenses as needed,” Bessent said in a post to X. “This general license will help stabilize the physical crude market and ensure oil reaches the most energy-vulnerable countries.”
Bessent also said the extension would help “reroute” existing supply to countries that need it most by reducing China’s ability to stockpile discounted Russian oil.
Before the war, roughly 20 million barrels of crude oil and other oil products passed through the strait each day, equivalent to around 20% of global crude trade.
As many as 180 vessels could transit the waterway on a daily basis. That traffic has dropped by as much as 97% since the end of February.
These disruptions to global energy flows have caused the worst energy crisis seen globally, according to the International Energy Agency, as oil, gasoline, and jet fuel prices continue to surge.
As of Monday, international and domestic benchmarks of crude oil soared above $100, with Brent Crude selling at more than $111 a barrel. West Texas Intermediate was priced at around $107 a barrel. At the end of February, both were trading around $70 a barrel.
Prices at the pump have also rapidly risen, with the national average price of gasoline hitting $4.515 a gallon on Monday, according to AAA. This is just about $0.50 less than the all-time high recorded in 2022.
The Trump administration has been heavily criticized by Democrats for issuing the waiver, as many on the Left argue that it props up Moscow and its war in Ukraine.
TRUMP ADMINISTRATION LETS RUSSIAN SEABORNE OIL SANCTIONS WAIVER EXPIRE
“With the average price of gas above $4.50 a gallon, there is no evidence that this license is reducing costs for American families burdened by the President’s conflict in the Middle East,” Sens. Jeanne Shaheen (D-NH) and Elizabeth Warren (D-MA) said in a statement on Friday.
“Meanwhile, Trump is lining Putin’s coffers at the same time that Russia has offered Iran assistance in targeting and killing American service members,” their statement reads. “The Administration has failed to explain how this license helps Americans or oil markets.”
