On Wednesday, Treasury Secretary Scott Bessent told reporters the United States would not renew sanctions waivers on Russian oil. On Friday, the Treasury Department renewed them.

The whiplash took less than 48 hours. The new general license allows countries to purchase Russian crude and petroleum products loaded onto vessels as of April 17, with transactions permitted through May 16. It replaces a 30-day waiver that expired on April 11 and excludes transactions involving Iran, Cuba, and North Korea.

The stated reason is straightforward enough. “As negotiations accelerate, Treasury wants to ensure oil is available to those who need it,” a Treasury Department spokesperson said. But the subtext is barely submerged: the US-Israeli war with Iran, now entering its eighth week, has broken global energy markets in ways that make enforcing sanctions on Russia economically untenable.

The Price of Principle

The International Energy Agency has called the Iran war the worst global energy supply disruption in history. More than 80 oil and gas facilities across the Middle East have been damaged. Tehran has threatened to close the Strait of Hormuz again if the US Navy blockade of Iranian ports continues. Global oil prices tumbled 9% on Friday to about $90 a barrel after Iran temporarily reopened the Strait of Hormuz.

Those numbers created a chain of pressure that proved impossible to resist. Asian countries hit by the energy shock lobbied Washington on the sidelines of G20, World Bank, and IMF meetings this week. Trump discussed oil in a call with Indian Prime Minister Narendra Modi. India depends on imports for more than 88% of its crude, and in March, Russian oil accounted for 44.4% of those imports, according to tanker data from commodity analytics firm Kpler.

High pump prices also threaten Republicans ahead of November’s midterm elections, adding a domestic dimension to what is framed as an international economic calculation.

200 Million Barrels and Counting

Russian President Vladimir Putin’s special envoy Kirill Dmitriev said the extension will affect another 100 million barrels of Russian oil, bringing the total volume covered by both waivers to 200 million barrels. Dmitriev traveled to the US on April 9 for meetings with Trump administration officials ahead of the previous waiver’s expiry, and noted on Telegram that the extension faced “active political opposition.”

He was right about that. Senator Richard Blumenthal wrote on X: “No way the Russia sanctions waiver should be extended. Trump’s waiver has handed Russia an extra $150 billion a day to fuel its murderous war machine.” Congressmen Gregory Meeks and William Keating introduced legislation to terminate such waivers, arguing in a joint statement that the administration had given Moscow a free pass to profit from rising energy costs while bankrolling its invasion of Ukraine.

The Sanctions Paradox

The deeper problem is structural. Economic sanctions are supposed to impose costs that change behavior. When those costs boomerang back onto the enforcing countries — through higher energy prices, supply shortages, or political fallout — the tool bends and then breaks.

Brett Erickson, a sanctions expert at Obsidian Risk Advisors, said Friday’s renewal is likely not the last. “The conflict has done lasting damage to global energy markets, and the tools available to stabilize them are nearly exhausted.”

European allies are watching with frustration. After a G7 finance ministers meeting in Washington, French Finance Minister Roland Lescure stressed that “Russia mustn’t be getting benefits from what’s happening in Iran” and that Ukraine should not be “collateral damage.” European Commission President Ursula von der Leyen has said now is not the time to relax sanctions on Russia.

The coordinated Western sanctions regime built after Russia’s 2022 invasion of Ukraine is now being selectively dismantled — not because Moscow changed its behavior, but because a separate conflict made enforcement too costly. The message to any energy-rich state contemplating aggression is difficult to miss: sanctions are discretionary, and their durability depends on nothing going wrong elsewhere.

The waiver runs until May 16. There is no particular reason to believe the next 28 days will produce a different calculation.

Sources