Bessent rules out renewal of Iranian and Russian oil waivers

Treasury Secretary Rules Out Waivers for Russian and Iranian Oil at Sea

Treasury Secretary Scott Bessent announced Friday that the United States will not renew a waiver permitting the purchase of Russian oil and petroleum products currently at sea, marking a significant shift in U.S. energy policy amid ongoing global conflicts.

“We think the Russian oil on the water has been largely sucked up,” Bessent told The Associated Press in an interview addressing the impact of international conflicts on global energy markets.

The Treasury Secretary was even more definitive regarding Iranian oil, declaring that any consideration of a waiver renewal for Iranian petroleum “is totally off the table” as tensions continue to escalate in the Middle East.

“Not the Iranians,” Bessent emphasized. “We have the blockade, and there’s no oil coming out.” He predicted severe consequences for Iran’s energy sector, adding, “We think in the next two, three days, they’re going to have to start shuttering production, which will be very bad for their wells.”

These statements come at a critical juncture as global energy markets struggle with disruptions caused by the closure of the Strait of Hormuz, a vital shipping channel through which approximately 20% of the world’s oil passes. The strait’s closure has created significant uncertainty in energy markets already strained by multiple geopolitical tensions.

The U.S. originally issued the waiver for Russian oil sales in March as crude oil prices surged above $100 per barrel, threatening economic stability across global markets. The measure was intended as a temporary solution to prevent further price spikes while maintaining pressure on Russia following its invasion of Ukraine.

Bessent’s announcement represents a reversal from recent policy decisions. The Treasury Department had previously renewed the waiver just two days after Bessent had publicly stated he had no plans to extend the sanctions relief, creating confusion about the administration’s approach to energy sanctions.

Explaining this earlier policy shift, Bessent cited humanitarian concerns that emerged during last week’s World Bank and International Monetary Fund meetings. “More than 10 of the most vulnerable and poorest countries came to me and said, ‘Can you help?'” he revealed. “It was for those vulnerable and poor countries. But I wouldn’t imagine that we’d have another extension.”

Energy analysts suggest that ending these waivers could create additional pressure on global oil supplies, potentially leading to price increases for consumers worldwide. The decision also reflects the administration’s balancing act between applying economic pressure on adversaries and managing domestic energy costs.

The restrictions on Iranian oil come as part of the broader U.S. strategy to isolate Tehran economically amid escalating regional conflicts. Iran’s oil sector, once a cornerstone of its economy, has already faced severe sanctions in recent years, but the current blockade represents an intensification of these measures.

Market watchers note that while major economies like China and India have developed alternative supply chains for their energy needs, smaller, more vulnerable economies may face greater challenges adapting to these restrictions. The decision not to renew waivers could particularly impact developing nations that rely heavily on affordable energy imports.

The Treasury Department’s stance signals that despite short-term market volatility, the administration intends to maintain its sanctions framework as a key tool of foreign policy, even as energy security concerns persist globally.

Industry experts will be closely monitoring oil price movements in the coming weeks as markets adjust to these policy decisions amid already heightened geopolitical tensions across multiple regions.