- The US will not renew waivers allowing oil purchases from Iran and Russia without sanctions
- Sanctions waivers helped stabilize global energy prices amid disruptions around the Strait of Hormuz
- India benefited by securing additional Russian and Iranian oil supplies during the waiver period
The United States has said it will not renew the waivers that allowed the purchase of some Iranian and Russian oil without facing US sanctions. India was a major beneficiary of the sanctions waivers, as they allowed New Delhi to continue the purchase of Russian oil amid disruptions around the Strait of Hormuz, which left several vessels stranded at sea.
"We will not be renewing the general licence on Russian oil, and we will not be renewing the general licence on Iranian oil. That was oil that was on the water prior to March 11. So all that has been used," Treasury Secretary Scott Bessent told reporters on Wednesday.
The moves signal an end to the Donald Trump administration's efforts to use the sanctions waivers to free up more oil supplies and lower soaring global energy prices, which have surged globally, including in the US, since the conflict in the Middle East escalated.
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When US Waivers Are Expiring
The temporary waivers were designed as a short-term measure to stabilise rising energy prices, allowing limited transactions involving oil already loaded onto vessels before specified deadlines to reach global markets and help relieve pressure on energy supplies during the war.
After Iran had put the major energy route through the Strait of Hormuz-- through which around 20 per cent of global crude and liquid petroleum gas (LNG) passes-- under its chokehold in March, the US had issued a 30-day licence permitting the delivery and sale of Russian crude loaded before March 12, with the waiver expiring on April 11.
A similar relaxation for Iranian oil was also issued by the Treasury Department on March 20, allowing some 140 million barrels of oil to reach global markets and helping relieve pressure on energy supply during the war. The waiver is set to expire on April 19.
The move not to renew the waivers came as Washington reinforces a "maximum pressure" approach on Iran amid the ongoing conflict.
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How US Waivers Helped India
The waivers on the purchase of Russian oil had allowed India to secure additional supplies amid global oil disruption. Reports suggest that Indian refiners have placed orders for roughly 30 million barrels of Russian oil during the period.
Major refiners, including Reliance, have already reduced purchases from Russian firms such as Rosneft and Lukoil amid US pressure in January this year, but they quickly reversed their strategy and began buying more oil from Russian companies.
Amid waivers, at least two supertankers carrying Iranian crude reached Indian ports, marking the first such deliveries in nearly seven years. Historically, India was a major buyer of Iranian crude, importing significant volumes of Iranian light and heavy grades due to strong refinery compatibility and favourable commercial terms.
Following sanctions tightening in 2018, imports ceased from May 2019, with volumes replaced by Middle Eastern, US and other grades. At its peak, Iranian crude accounted for 11.5 per cent of India's total imports.
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The Criticism That Followed
Despite their stated objective, they attracted significant criticism, particularly from the opposition Democrats in the United States.
"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 killing and kidnapping Ukrainian kids--while it aids Iran with intelligence to target our troops," said US Senator Richard Blumenthal in a post on X on April 10.
Other Democrats like Chuck Schumer also called for the Trump administration to reverse the "dangerous" sanctions waiver policy.
"In addition to flouting notification requirements to Congress under the Countering America's Adversaries Through Sanctions Act before relaxing sanctions on the Kremlin, Secretary Bessent characterised the licence as a temporary and 'short-term' measure that would not provide significant financial benefit to the Russian government," he said in a joint statement with two other Democrats.
"But Russia's decision to cancel its planned budget cuts demonstrates that, as we warned, Russia is directly benefiting from the administration's sanctions relief. It is incumbent on the Trump administration to reverse this dangerous policy, ensure that Russia does not reap any additional benefit and prevent the United States from further boosting Putin's war machine," the statement added.
