The United States has decided not to renew a temporary sanctions waiver that allowed limited purchases of Russian and Iranian oil by countries including India, signalling a return to stricter enforcement amid ongoing geopolitical tensions. US Treasury Secretary Scott Bessent said the general licence, meant to clear oil already at sea before March 11, has run its course and will lapse without extension.
“We will not be renewing the general licence on Russian oil and Iranian oil. That was oil that was on the water prior to March 11th. All that has been used,” Bessent said during a media briefing.
Simultaneously, the Donald Trump administration has threatened to sanction buyers of Iranian oil and said it believed China would pause such purchases as Washington enforces a maritime blockade on Iran.
“We have told countries that if you are buying Iranian oil, that if Iranian money is sitting in your banks, we are now willing to apply secondary sanctions,” the Treasury Secretary said.
Iran’s blockade of the Strait of Hormuz since the onset of the West Asia conflict has severely disrupted global oil supply chains. On March 6, the United States temporarily eased sanctions to allow India to import Russian oil that was already stranded at sea. A week later, this relaxation was extended to other countries. Similarly, on March 20, the US permitted the delivery and sale of Iranian-origin crude oil and petroleum products that had already been loaded onto vessels.
The decision to end the waiver, coupled with the threat of fresh sanctions, particularly on Iranian oil, signals the Trump administration’s strategy towards a more economically driven campaign aimed at squeezing Tehran, rather than relying solely on military measures. Bessent added, “Iranians should know that this is going to be the financial equivalent of what we saw in the kinetic activities.”
A US official told news agency Reuters that the “Treasury is going full force with ‘Economic Fury’” on Iran, an apparent reference to Operation Epic Fury, the US-led military campaign targeting the country.
Oil prices declined in early trading on Thursday amid hopes of easing US-Iran tensions, after reports suggested Tehran may allow vessels to pass through areas around the Strait of Hormuz. The development comes as both Washington and Tehran prepare for a second round of peace talks in Oman.
The White House on Wednesday voiced optimism about reaching an agreement to end the conflict with Iran, while warning that economic pressure on Tehran would intensify if it remains unyielding. A source briefed on the matter told Reuters that Iran could consider allowing ships to sail freely along the Omani side of the Strait of Hormuz if a deal is reached to avert further escalation.
For India, one of the world’s largest crude importers, tighter sanctions could add pressure to the oil market. However, the government maintains that the country has adequate supplies and a well-diversified sourcing strategy. India continues to be one of the largest buyers of Russian crude, while Iranian oil, which was once a key part of its energy basket, has largely remained off-limits due to US sanctions.
Under the temporary sanctions waiver, India received its first Iranian oil shipment in seven years last week, with about 4 million barrels arriving aboard two vessels.
Article source: bawaal.in
