US Extends Russian Oil Sanctions Waiver Until Mid-June

On May 19, US Treasury Secretary Scott Bessent announced that the United States would extend for an additional 30 days the sanctions waiver license for countries purchasing Russian oil and petroleum products currently loaded onto tankers at sea. The decision is effective until June 17.

On social media platform X, Bessent stated that the extension aims to "provide the most vulnerable countries temporary access to Russian oil currently stranded at sea." He emphasized that this move will help stabilize the physical crude oil market, ensure oil reaches countries with the most urgent energy needs, and reduce the likelihood of China stockpiling discounted oil.

This is the second extension since the US issued the first waiver license in March, when crude oil prices surged above $100 a barrel following US-Israel airstrikes on Iran. In April, Bessent told the AP that Washington had no plans to extend, but energy markets remained volatile due to escalating tensions in the Strait of Hormuz and the US naval blockade of Iranian ports.

According to analytics firm Kpler, approximately 113 million barrels of Russian crude and condensate are currently loaded onto tankers at sea, with about 106 million barrels in transit. Floating storage has declined significantly from 19 million barrels at the end of January to 7 million barrels. Kpler analyst Johannes Rauball noted that Ukrainian drone attacks have disrupted export infrastructure and reduced transportation capacity, keeping Russian crude output at an average of about 9.1 million barrels per day, below OPEC+ quotas.

India and China remain the largest buyers of Russian oil. Despite President Donald Trump's claim that Indian Prime Minister Narendra Modi committed to halting Russian oil purchases from October 2025, Russian oil exports to India last month exceeded 2 million barrels per day, compared to 1.72 million barrels per day the previous month. Exports to China declined slightly to 1.05 million barrels per day.

Sujata Sharma, Joint Secretary of India's Ministry of Petroleum and Natural Gas, affirmed that New Delhi purchased Russian oil before the waiver existed, and "with or without the waiver, it does not affect our supply." Kpler analyst Sumit Ritolia assessed that India is unlikely to reduce purchases of Russian crude even if sanctions are reimposed, due to supply security and economic considerations.

The waiver extension benefits Moscow as many Russian oil tankers have rerouted from China to India. Vortexa analyst Anna Zhminko noted that the route from Russia to India is significantly shorter, facilitating trade for Russia. She also forecast that Russian oil exports to other Asian countries such as Brunei, Indonesia, and the Philippines could increase.

However, Ukraine and its European allies criticized the decision, arguing that waivers are fueling the Russian economy with oil revenue. US Senators Jeanne Shaheen and Elizabeth Warren called it an "indefensible gift" to Russian President Vladimir Putin, enabling him to finance the illegal war in Ukraine. They also argued that easing sanctions does not help lower domestic gasoline prices.

According to the International Energy Agency, Russian crude exports in April rose by 250,000 barrels per day to 4.9 million barrels per day. Brent crude has risen from $66 a barrel to over $100 a barrel since the war with Iran began, currently trading around $110. Russian Urals oil is trading at $97-100 a barrel, up from below $60 before the war, giving Russia $490 million a day in oil revenue despite sanctions.

Hamad Hussain, commodities economist at Capital Economics, said the impact of the waiver extension on oil prices would be limited because it applies only to oil loaded onto ships before mid-April. The additional unsanctioned oil available for purchase is small compared to lost supply from the Middle East. "Oil prices are likely to continue rising as long as traffic through the Strait of Hormuz is disrupted," he added.