The United States has allowed a sanctions waiver permitting the purchase of Russian oil cargoes stranded at sea to expire without renewing the authorization, amid the global energy crisis linked to tensions in the Middle East and the ongoing war in Ukraine.
According to the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), the temporary waiver expired at 12:01 a.m. Eastern Daylight Time on May 16. No extension had been issued by the Treasury Department as of Friday.
The waiver had allowed countries to continue buying Russian crude oil and petroleum products that were already in transit despite broader sanctions imposed on Moscow following its invasion of Ukraine.
U.S. Treasury Secretary Scott Bessent had earlier indicated that Washington did not intend to renew the authorization.
Waiver allowing purchases of Russian oil renewed
The temporary license was first renewed on April 17 after an earlier exemption expired on April 11.
The measure had been introduced as global energy markets faced heightened volatility following U.S. and Israeli strikes on Iran on February 28.
Also Read: Netanyahu Moves to Split with US as Iran Crisis Sends Oil Prices Soaring
This triggered a major disruption in oil shipments after Tehran moved to close the Strait of Hormuz, one of the world’s most critical shipping routes for crude oil.
Roughly 20 percent of global oil supply passes through the narrow waterway linking the Persian Gulf to international markets.
The closure caused significant shipping delays and left large quantities of sanctioned Russian crude stranded at sea, prompting the Trump administration to issue temporary authorizations allowing those shipments to reach buyers.
The latest waiver, issued on March 19 by the Treasury Department, replaced an earlier authorization from March 12 and permitted transactions involving Russian oil that had already been loaded onto tankers before that date.
However, the authorization maintained restrictions involving North Korea, Cuba and Crimea, which remain subject to separate sanctions frameworks.
At the time, Treasury Secretary Bessent described the policy as a narrowly tailored intervention aimed at stabilizing global supply rather than increasing Russian revenues.
“To increase the global reach of existing supply, Treasury is providing a temporary authorization to permit countries to purchase Russian oil currently stranded at sea,” Bessent said after the March renewal.
United States defends move
He also argued that the move would not significantly benefit Moscow financially because Russia derives much of its energy income through taxes levied at the point of extraction rather than at final sale.
“There are hundreds of millions of barrels of sanctioned crude on the water,” Bessent had said earlier. “By unsanctioning them, Treasury can create supply.”
The waiver on Russian oil cargoes had been viewed as a short-term measure to prevent further disruptions in an already strained energy market as the Middle East conflict pushed oil prices higher and increased demand for alternative supplies.
Also Read: UK Reports Vessel Seized Off UAE Coast, Heading Toward Iran
The war involving the United States, Israel, and Iran has continued to affect global energy markets, with the Strait of Hormuz remaining central to international concerns over supply chains and shipping access.
On Friday, Iranian officials said Tehran had prepared a new mechanism to manage traffic through the Strait of Hormuz, including collecting fees from vessels using the route.
Iranian politician Ebrahim Azizi said details of the mechanism would be announced soon.
A reporting from the Strait of Hormuz by Al Jazeera said heavy ship congestion had turned parts of the waterway into what local authorities described as “a parking lot for ships” as regional tensions continued.
Former U.S. State Department official Alan Eyre told Al Jazeera that the longer the Strait of Hormuz remains disrupted, the greater the economic consequences for global markets.
“So the U.S. is faced with no good way out of this,” Eyre said.
The ongoing tensions have also contributed to increased Russian energy revenues in recent months, as higher oil and gas prices boosted demand for Russian exports despite Western sanctions.
The U.S. sanctions waiver had provided temporary relief to countries seeking access to already-shipped Russian crude amid fears of shortages and further price increases.
Meanwhile, the Treasury Department has not announced any replacement measure following the expiration of the waiver.
The decision means that transactions involving previously exempted Russian oil cargoes could once again fall under existing U.S. sanctions unless new guidance is issued by OFAC.
