New U.S. Shock To The Oil Market?

According to SAEDNEWS, the U.S. Treasury Department did not renew the sanctions waiver that had allowed countries to purchase Russian oil stranded at sea.

The temporary general license issued by the U.S. Treasury Department, which had previously been extended on April 17, expired precisely at 12:01 a.m. Eastern Daylight Time (EDT).

These temporary waivers were first issued in March following the February 28 military strikes by the United States and Israel against Iran.

In response to those attacks, Tehran moved to restrict the passage of ships linked to hostile countries through the Strait of Hormuz, the vital waterway through which around 20 percent of the world’s consumed oil passes.

Following the disruption and the sharp surge in prices, the Trump administration temporarily allowed sanctioned Russian and Iranian oil that had already been loaded and left stranded at sea to enter buyer markets in order to compensate for supply shortages and prevent fuel prices from exploding and oil from reaching $150 per barrel.

The expiration of this waiver comes as countries such as India and Indonesia, which are heavily dependent on oil imports, had conducted intensive lobbying efforts with the U.S. Treasury Department to secure another extension.

According to Bloomberg, India significantly increased its purchases of Russian oil during April and May due to the energy crisis caused by the Hormuz disruption, reaching unprecedented levels.

On the other hand, Washington’s European allies and several senior Democratic senators strongly opposed extending the waiver.

They argued that the decision had effectively become a major source of revenue for the Kremlin to finance the war in Ukraine, while also failing to significantly reduce the impact of $4.5 gasoline prices at American fuel stations.

With the simultaneous expiration of oil waivers for both Russia and Iran, the U.S. Treasury Department announced that its strategy is shifting toward a phase of “economic fury.” Washington is now seeking to completely block Iranian and Russian oil revenues and intensify pressure on parallel shipping networks.

However, international observers warn that with the Strait of Hormuz still effectively blocked and millions of barrels of oil physically removed from the daily market supply, insisting on not extending the waivers could once again push global oil prices toward new highs.

According to them, if the fuel crisis inside the United States intensifies, Trump and Scott Bessent may once again reconsider their decision to end the Russian oil sanctions waiver.