The U.S. Treasury has again extended relief on Russian seaborne oil sanctions – its third consecutive monthly renewal – even as crude futures rose roughly 2% to around $103 a barrel, underscoring how Strait of Hormuz disruptions are forcing Washington into repeated policy reversals.
For macro investors, the pattern matters: each rollover chips away at the credibility of the broader Russia sanctions regime while simultaneously signalling that global supply remains too tight to absorb a sudden removal of Russian barrels from the market.
Key Takeaways
- Treasury issued General License 134B, valid through mid-June 2026.
- U.S. benchmark crude hit ~$103/bbl on the latest extension news.
- Senate Democrats and Ukraine have condemned each renewal as sanctions erosion.
Market Reaction & Context
U.S. benchmark crude was trading near $103 a barrel on the day Treasury Secretary Scott Bessent confirmed the latest extension – up roughly 2% on the session – as markets priced in continued Hormuz supply constraints now entering their third month 1. That level compares with Brent prices that spiked sharply when Iran-related shipping disruptions began earlier in 2026, and it illustrates the floor that Russian seaborne supply has helped prevent from becoming a ceiling.
The waiver, formally designated General License 134B by the Office of Foreign Assets Control (OFAC), authorises transactions tied to Russian crude and petroleum products already loaded onto vessels, running through mid-June 2. It excludes transactions involving Iran, Cuba, and North Korea.
A Pattern of Reversals
The sequence of events has become a template: Bessent signals the waiver will lapse, markets react, and Treasury reverses within days. That cycle has now played out three times since the initial General License 134A was issued in March 3. The first extension came in April after Bessent said publicly he would not renew; the second extension, issued in May, followed his pledge to the Associated Press that there would be no repeat.
Bessent defended the May extension in congressional testimony, saying more than 10 energy-vulnerable nations had approached Treasury directly. “If we had not done that sanctions relief, [oil prices] might have been at $150 [a barrel],” he said, arguing Russia was netting less revenue than it would have under a higher-price scenario 1.
Sanctions Architecture Under Strain
Critics argue the cumulative effect is structural rather than episodic. Brett Erickson, managing principal at Obsidian Risk Advisors, said the humanitarian framing leaves Treasury with little room to reverse course so long as the Hormuz crisis persists. “There’s really not another option,” Erickson said, noting that conditions for energy-dependent Asian economies had worsened each month the conflict continued 1.
Matthew Murray, former deputy assistant secretary of commerce for Europe, the Middle East and Africa, framed the waivers as a deliberate carrot-and-stick calculation. “The question now is whether President Donald Trump can successfully apply both carrots and sticks,” Murray said, cautioning that outcomes remain uncertain 2.
Ukraine’s position is unambiguous. Vladyslav Vlasiuk, a senior adviser to President Volodymyr Zelenskyy, said even temporary waivers translate into billions of dollars in additional revenue for Moscow’s war effort, and he questioned whether Russian oil volumes are large enough to offset Hormuz losses anyway 2. Leading Senate Democrats – including Chuck Schumer, Elizabeth Warren and Jeanne Shaheen – called the repeated renewals a “180-degree reversal” and said the decision was “shameful” 2.
Outlook
Separately, Treasury allowed its waiver on Iranian oil to expire and has launched what Bessent has labelled “Operation Economic Fury,” targeting so-called teapot refineries in China that process Iranian crude 1. President Trump also said he was considering lifting sanctions on those same Chinese refiners, adding another layer of policy ambiguity to the energy market 1.
For sector-focused investors, the key variable remains the Strait of Hormuz. As long as that chokepoint stays constrained, the political cost of letting Russian crude waivers lapse likely outweighs the geopolitical cost of extending them – a calculus that may persist well into the second half of 2026.
Not investment advice. For informational purposes only.
References
1James Bikales (May 18, 2026). “Treasury extends Russian oil sanctions waiver for another month”. POLITICO. Retrieved June 17, 2026.
2Alex Raufoglu (Apr 18, 2026). “US Quietly Renews Russian Oil Waiver Amid Market Turmoil, Policy Confusion”. Radio Free Europe/Radio Liberty. Retrieved June 17, 2026.
3Midhat Fatimah (Apr 18, 2026). “US extends waiver allowing purchase of Russian oil”. Deutsche Welle. Retrieved June 17, 2026.
4(May 18, 2026). “U.S. Allows Russian Oil Sanctions Waiver To Expire, Raising Fresh Energy Security Concerns For India”. Mint via YouTube. Retrieved June 17, 2026.