U.S. extends Russian oil waiver as fuel-price pressure intensifies

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U.S. extends oil waiver

Highlights

Treasury Secretary Scott Bessent announces a new 30-day waiver allowing sanctioned Russian oil to reach vulnerable nations to stabilize crude markets and contain price gains.
Brent crude surges over 50% to above $110 a barrel, driving U.S. petrol up 51% to $4.52 a gallon and diesel to $5.63, intensifying consumer and political pressure.
Opposition to the waiver grows as Democratic senators argue it boosts Russian revenues from the Iran war and fails to lower American fuel costs.

Waiver renewal targets tight oil market

As reported by Financial Times, Treasury Secretary Scott Bessent says his department will issue a new 30-day licence to allow the most vulnerable nations temporary access to Russian oil currently stranded at sea. The step marks the second extension of a waiver introduced in March, which lets sanctioned Russian oil continue flowing to global markets as Washington seeks to limit further gains in crude prices.

Bessent says the general licence will help stabilise the physical crude market and ensure oil reaches the countries most exposed to energy shortages. He also says the move is intended to help reroute existing supply to countries most in need while reducing China’s ability to stockpile discounted oil.

The administration is struggling to contain the jump in oil prices since President Donald Trump launched the war against Iran in late February. Brent crude rises by more than half to above $110 a barrel on Monday, adding to pressure across fuel markets.

Consumer and political fallout grows

Higher crude prices are driving up costs at the pump across the U.S., with petrol prices up 51% to $4.52 a gallon, according to the American Automobile Association. Diesel prices, a key cost for U.S. industry, rise by a similar margin to $5.63 a gallon and approach a record high.

A Brown University paper published on Monday finds the war in Iran has cost Americans more than $40 billion in additional fuel costs since the conflict began. Voter frustration is also mounting, with a recent FT poll finding that 58% of Americans disapprove of Trump’s handling of the cost of living.

The administration is taking several steps to lower fuel costs, including releasing record volumes from the U.S. Strategic Petroleum Reserve, easing shipping and environmental restrictions on fuel and proposing a suspension of federal taxes on petrol and diesel. Those efforts have only limited effect, while the Russian oil waivers remain politically contentious because critics say they risk strengthening Moscow’s revenues.

Democratic senators Jeanne Shaheen and Elizabeth Warren urged the Treasury Department last week not to renew the waiver, calling it an ill-conceived policy that helps Russia make more money from the Iran war. They say there is no evidence the licence is reducing costs for American families, while Russia has offered Iran assistance in targeting U.S. service members.

Our earlier report on the EU’s revised spring economic outlook covered how the Iran war’s energy disruption is forcing policymakers to mark down growth expectations and lift inflation projections as oil stays above $100 a barrel. It also highlighted the risk of tighter physical supply as global oil stockpiles deplete rapidly, raising the odds of further price spikes and deepening the policy squeeze across Europe.

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