The US Treasury Department plans to extend a sanctions waiver for Russian offshore oil for another 30 days, following requests from several countries asking for more time to purchase the fuel due to supply disruptions amid escalating tensions in the Middle East.
This was announced by US Treasury Secretary Scott Bessant.
The sanctions relief will remain in effect for another 30 days, Besant said. It was requested by several poor and vulnerable nations that have faced oil supply problems following the escalation of the conflict over Iran and the closure of the Strait of Hormuz.
“This extension will provide additional flexibility, and we will work with these countries to provide specific licenses as needed,” he noted.
This is the second time that Washington has granted a temporary waiver on sanctions against Russian oil. The first such exemption was introduced in March to reduce the global market deficit and contain a sudden rise in prices amid US and Israeli attacks on Iran.
While this move did not significantly lower oil prices, it helped some countries, including India, which had previously been one of the largest buyers of Russian oil before the imposition of tougher US sanctions.
Amid concerns about supply disruptions, futures for benchmark Brent crude rose about 1.5% on Monday to around $111 a barrel.
At the same time, the US Treasury Secretary, during a meeting of financial leaders of the G7 countries in Paris, called on allies to strengthen compliance with sanctions against Iran in order to limit the financing of its military programs.
As a reminder, on April 18, the US Treasury Department's Office of Foreign Assets Control (OFAC) issued a new license that allows for the supply and sale of Russian oil and petroleum products already loaded onto vessels.