The U.S. Treasury Department has decided to extend the suspension of sanctions on Russian oil shipments in an effort to alleviate oil shortages caused by the Iran war, contrary to the earlier stance of Secretary Scott Bessent.
US Extends Russian Oil Sanctions Suspension
The Treasury Department announced on Friday that its decision will let Russian oil shipments loaded onto tankers from that day forward avoid U.S. sanctions for 30 days.
This means the order permits Russian oil shipments loaded before April 17 to be delivered through May 16.
The extension follows a similar 30-day license issued in March.
The move highlights how the Iran war’s aftermath has bolstered Moscow’s capacity to profit from its energy exports, which had been restricted since the invasion of Ukraine. However, Ukrainian drone strikes have disrupted Russian refining and export infrastructure, temporarily limiting its ability to fully capitalize on higher oil demand.
Earlier in the week, Bessent had publicly dismissed the possibility of extending the license. “We will not be renewing the general license on Russian oil, and we will not be renewing the general license on Iranian oil,” he had stated at the White House.
Economists Warn Of Broader War Financing And Supply Chain Risks
The decision also contrasts with warnings from economists like Robin Brooks, who have argued that restricting Russian oil exports is crucial to limiting Moscow’s war financing capacity.
Amid sanctions-related disruptions in March, economist Steve Hanke also warned that Russia’s dominance in fertilizer exports could add pressure on global agricultural supply chains, as it controls up to 40% of global ammonium nitrate trade.
The development also followed Iran closing the Strait of Hormuz, a critical waterway, on Saturday, one day after it had been declared open.
Photo courtesy: Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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