US Extends Sanctions Waiver for Russian Oil at Sea

The United States has once again extended its sanctions waiver on Russian oil already in transit, aiming to increase global supply. The latest notice from the Treasury Department’s Office of Foreign Assets Control (OFAC) extends the waiver by 30 days, until June 17. This waiver specifically applies to Russian oil that was loaded onto tankers before April 17.

Purpose and Scope of the Waiver

US Treasury Secretary Scott Bessent stated that the temporary waiver is designed to "provide the most vulnerable nations with the ability to temporarily access Russian oil currently stranded at sea." He emphasized that the extension offers additional flexibility and that the US will work with these nations to provide specific licenses as needed. Bessent noted that this general license will help stabilize the physical crude market and ensure oil reaches the most energy-vulnerable countries. The waiver, first introduced in mid-March amid surging oil prices following the US-Israel conflict with Iran, was also extended in April. Consistent with previous OFAC notices, the latest extension prohibits sales of Russian oil to Iran, North Korea, and Cuba.

Market Context and Reactions

The Trump administration has sought to contain oil price surges since the conflict began, using measures such as sanctions relief and releasing 172 million barrels of crude from the Strategic Petroleum Reserve (SPR). US Energy Secretary Chris Wright attempted to further calm markets, suggesting that the Strait of Hormuz—through which roughly one-fifth of the world’s oil and gas supplies flow—could be reopened by the summer. However, Fatih Birol, executive director of the International Energy Agency (IEA), warned that existing emergency stockpiles may only last for weeks as global energy markets continue to recover. On Monday, front-month futures for Brent crude were flat, while West Texas Intermediate (WTI) rose by about 3%, with both trading around $109 per barrel.