U.S. Treasury to extend sanction waiver on Russian seaborne oil, source says

The US Treasury Department is considering a 30-day extension of the sanction waiver that previously allowed countries to purchase Russian seaborne oil, accor...

What Happened

The US Treasury Department is considering a 30-day extension of the sanction waiver that previously allowed countries to purchase Russian seaborne oil, according to official sources.
The potential extension was sought primarily by vulnerable and developing nations that have been cut off from Gulf oil supplies following Iran's closure of the Strait of Hormuz since late February 2026.
The waiver in question — General License 134B — had already lapsed on May 16, 2026, with US Treasury Secretary Scott Bessent having previously indicated the licence would not be renewed; the reported extension signals a possible policy reassessment driven by humanitarian and supply-security concerns.
The waiver specifically covered Russian-origin crude oil and petroleum products already loaded onto vessels before a designated cut-off date, authorising their delivery and sale.
The Iran-US-Israel conflict and the resulting Hormuz blockade have severely disrupted oil access for nations that traditionally sourced Gulf crude, forcing them toward Russian and other alternative supplies.

Static Topic Bridges

OFAC General Licenses and the Sanctions Waiver Mechanism

The Office of Foreign Assets Control (OFAC) under the US Treasury Department administers US economic and trade sanctions. A General License (GL) is a blanket authorisation that permits categories of transactions otherwise prohibited by a sanctions programme, without requiring individual applicants to seek case-by-case approval. General Licenses can be time-limited, require specific conditions, or both.

GL 134B authorised transactions "ordinarily incident and necessary to the sale, delivery, or offloading" of Russian-origin crude oil loaded on vessels on or before April 17, 2026, effective through May 16, 2026.
The licence also permitted ancillary services including safe docking, crew safety, emergency repairs, bunkering, insurance, and salvage.
The GL 134B was a successor to GL 134A, reflecting iterative extension of the waiver as supply pressures mounted.
The $60-per-barrel G7 price cap on Russian crude oil, operative since December 2022, is a parallel mechanism distinct from the OFAC waiver structure.

Connection to this news: The potential 30-day extension of GL 134B reflects a tension inherent in US sanctions policy: the goal of restricting Russian oil revenues conflicts with the humanitarian and stability costs of supply shortages for third countries, especially during an acute supply crisis.

Global Oil Market Disruptions and Supply Concentration Risk

Global oil markets are sensitive to chokepoint disruptions because crude oil is not fungible in real time — refineries are configured for specific crude grades, and rerouting shipments involves infrastructure, logistics, and insurance costs. The Strait of Hormuz blockade has simultaneously removed a large volume of Gulf crude from accessible markets while driving up shipping costs and insurance premiums on remaining supply routes.

In 2024, approximately 20 million bpd of petroleum transited the Strait of Hormuz — about 20% of global petroleum liquids consumption.
Countries with limited reserve capacity or long-term supply agreements face acute spot market pressure when a major corridor is blocked.
The blockade has disproportionately affected poorer countries without strategic petroleum reserves (SPR) or currency reserves to absorb price spikes.
Russia has emerged as an alternative supplier, but purchasing Russian crude exposes buyers to secondary sanctions risk unless a waiver is in force.

Connection to this news: The extension request by "poor and vulnerable countries" underscores the asymmetric impact of geopolitical disruptions on developing-nation energy security — a theme directly relevant to global energy governance debates.

US Sanctions Architecture Against Russia

The United States has maintained escalating sanctions against Russia since the 2014 annexation of Crimea, with a major expansion following the 2022 invasion of Ukraine. The sanctions target Russia's energy sector, financial institutions, and key individuals. The Ukraine-/Russia-related Sanctions programme under Executive Orders 13685, 13694, 13949, 14024, and others covers a wide range of transactions. Energy sanctions specifically target Russian state energy companies, their subsidiaries, and associated shipping infrastructure.

Executive Order 14024 (April 2021) provides the core legal authority for broad Russia sanctions, targeting the financial, energy, metals, and technology sectors.
The G7 oil price cap ($60/barrel for crude; lower caps for refined products) was a multilateral instrument to limit Russian oil revenues while maintaining supply.
Secondary sanctions can target non-US entities that conduct "significant transactions" with sanctioned Russian entities, creating compliance risk for global banks and shipping companies.
Since the February 2026 conflict, Russia's role as a swing supplier to displaced buyers has increased its leverage in global energy markets.

Connection to this news: The contemplated waiver extension shows how the Iran conflict has complicated the US sanctions strategy against Russia, inadvertently improving Russia's export market access as an alternative supplier to Hormuz-blocked buyers.

Key Facts & Data

OFAC General License 134B lapsed on May 16, 2026; a 30-day extension is under consideration.
The waiver covered Russian-origin crude and petroleum products loaded on vessels before April 17, 2026.
Iran has blockaded the Strait of Hormuz since February 28, 2026, cutting off Gulf crude access for numerous countries.
Approximately 20 million bpd of petroleum — about 20% of global petroleum liquids consumption — passed through the Strait of Hormuz annually before the blockade.
India is the largest single consumer of Russian seaborne crude; its imports were approaching 1.9 million bpd in May 2026.
The G7 Russian crude oil price cap has been set at $60 per barrel since December 2022.