US extends Russian oil sanctions waiver as Iran war squeezes supply

WASHINGTON — The US Treasury Department has extended a sanctions waiver on Russian oil shipments amid supply shortages caused by Iran’s closure of the Strait of Hormuz. 

Treasury Secretary Scott Bessent said in a post on X Monday that his department was issuing a temporary 30-day so-called general license “to provide the most vulnerable nations with the ability to temporarily access Russian oil currently stranded at sea.” 

“This general license will help stabilize the physical crude market and ensure oil reaches the most energy-vulnerable countries,” Bessent said. “It will also help reroute existing supply to countries most in need by reducing China’s ability to stockpile discounted oil.”

The general license applies only to Russian crude oil and petroleum products loaded onto tankers that are currently at sea. The Trump administration approved a 30-day waiver temporarily lifting the sanctions in March, before renewing it in April. 

European allies as well as congressional Democrats have been critical of the waivers, arguing they undermine Western efforts to squeeze Russia’s wartime revenue. In a letter to the Treasury Department on Friday, Sens. Jeanne Shaheen (D-N.H.) and Elizabeth Warren (D-Mass.) urged the Treasury Department not to reissue the waiver, which they warned was “lining [Vladimir] Putin’s coffers."

“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,” the senators wrote. 

Ukrainian President Volodymyr Zelenskyy has also warned against relaxing the sanctions, writing on X last month that "every dollar paid for Russian oil is money for the war."

Oil prices fluctuated on Monday, a day after a suspected Iranian drone strike set off a fire near the United Arab Emirates’ lone nuclear power plant and Saudi Arabia said it intercepted three drones coming from Iraqi airspace. Brent crude, the international benchmark, opened above $111 per barrel on Monday after ending last week at $109.47.

On Monday, Bessent and his G7 counterparts gathered in Paris for talks focused on the war’s economic fallout. Fatih Birol, head of the International Energy Agency, told reporters in the French capital that global commercial oil inventories are “depleting very fast,” with only a few weeks’ worth of supply remaining.

The extension of the Russian oil waiver comes as President Donald Trump threatened to restart military operations as negotiations with Iran stall over reopening the Strait of Hormuz and curbing the country’s nuclear program. Trump said in a Truth Social post on Sunday that Iran “better get moving, FAST, or there won’t be anything left of them.”

Iran submitted a new proposal to mediator Pakistan Sunday night. The same sticking points that have plagued negotiations for months remain unresolved, including Iran’s insistence on its right to enrich uranium and maintaining control over the Strait of Hormuz.

Trump is expected to convene his national security team in the Situation Room on Tuesday to discuss military options, according to Axios. 

This developing story has been updated since initial publication.