US Treasury extends Russian oil waiver by 30 days

What the US Treasury changed

The US Treasury Department has issued a temporary 30-day general licence that allows the most energy-vulnerable nations to access Russian oil stranded at sea. The move is framed as a market-stabilisation step at a time when global crude supply routes have been disrupted. Treasury Secretary Scott Bessent described the licence as a short-term measure and said it is designed to redirect supply to “countries in need.” He also said the extension creates room for the US to issue specific licences where required.

The waiver covers purchases of Russian seaborne oil and petroleum products already on tankers, without violating severe US sanctions imposed on major Russian oil companies. Reuters reported the extension followed requests from poorer and vulnerable countries seeking more time to continue purchases. The countries were not identified in the report.

Why the waiver is being extended now

The latest extension comes after a previous waiver lapsed. Bessent said the Treasury was issuing the 30-day general licence after the earlier waiver expired on May 16, and Reuters also described a prior lapse on Saturday before the new extension.

A source cited by Reuters said the second waiver extension was requested by countries that cannot get Gulf oil shipments due to the US-Israeli war with Iran and the closure of the Strait of Hormuz. The situation in the Gulf has tightened shipping routes and raised concerns about near-term supply availability in parts of Asia and other import-dependent regions.

Focus on redirecting barrels away from China

US messaging around the waiver also targets the flow of discounted Russian oil into China. Bessent said the general licence will help reroute existing supply to countries most in need by reducing China’s ability to stockpile discounted oil.

The stated aim is not to create new trade channels, but to shift where already-floating cargoes end up. The reference to oil “stranded at sea” indicates that the focus is on tankers awaiting buyers, rather than a broader reopening of sanctioned trade.

Link to Gulf disruptions and the Strait of Hormuz

The waiver was first issued in March to ease oil supply shortages and mitigate price spikes linked to the Iran conflict and disruptions in the Strait of Hormuz. The Strait is a key chokepoint, and the article notes that about 20% of global energy supplies pass through Hormuz.

In this context, the waiver is positioned as a stop-gap to keep physical crude markets supplied while normal routes remain constrained. One report in the provided text also notes “30 tankers with Russian crude await buyers after waiver,” underscoring the at-sea inventory that the licence is designed to clear.

What this could mean for India’s oil procurement

India is repeatedly cited as a major beneficiary of the waiver, given its role as a large buyer of Russian crude since Western sanctions reshaped trade flows. Reuters also reported that Indian officials said purchases were driven by commercial considerations and would continue regardless of Washington’s stance.

Sujata Sharma, Joint Secretary in India’s petroleum ministry, said during a media briefing on May 18: “There is no shortage of crude.” She also said: “Regarding the American waiver on Russia, I would like to emphasise that we purchased from Russia earlier, before the waiver also, during the waiver also, and now also.”

Separately, another section in the provided text says India sources nearly 40% of its oil imports from the Middle East, with a significant portion transported through the Strait of Hormuz. It also states that in February, India imported about 20% of its total crude oil imports from Russia, amounting to around 1.04 million barrels per day.

Market backdrop: Brent at $111 and supply anxiety

The extension arrives amid heightened price sensitivity. One portion of the article text notes benchmark Brent crude touching $111 a barrel due to a supply crunch, which had made global markets nervous.

While the waiver is presented as a tool to soften immediate supply pressures, the article also notes that earlier waivers “have done little to reduce oil prices,” even as they supported buyers such as India. That contrast highlights the challenge policymakers face when physical supply concerns collide with broader risk premiums linked to geopolitics.

What the US has said publicly

Bessent’s public statements emphasise three outcomes: flexibility, market stability, and directing oil toward energy-vulnerable countries. In his post, he said the extension “will provide additional flexibility, and we will work with these nations to provide specific licenses as needed.” He added that the general licence “will help stabilize the physical crude market and ensure oil reaches the most energy-vulnerable countries.”

In another excerpt included in the prompt, Bessent said on Fox Business that the US had allowed Indian refiners to buy Russian oil stranded at sea as a temporary measure to ease a “temporary gap” in global supply. The same excerpt also said Washington could consider lifting more sanctions if supply pressures continue, though no further action was confirmed in the provided text.

Key facts at a glance

Why the decision matters for markets and policy

The extension shows the US trying to balance sanctions pressure with the practical need to keep crude moving when major trade routes are disrupted. By limiting the waiver to cargoes already at sea, the Treasury is signalling that this is meant to be a short-term plumbing fix, not a structural dilution of sanctions.

For import-dependent economies, the waiver functions as an option to draw on floating supply when Gulf cargoes are harder to secure. For India, the reporting suggests refiners are focused on commercial terms and continuity of supply, while officials publicly maintain that there is no immediate shortage.

What to watch next

The licence is explicitly temporary and set for 30 days, with the Treasury indicating that specific licences could be issued as needed. The next key signposts will be whether Gulf shipping conditions normalise, whether more waivers are allowed to lapse and then renewed again, and how quickly at-sea Russian cargoes are absorbed by “energy-vulnerable” buyers.