US Treasury Secretary Says Won’t Renew Iranian And Russian Oil Waivers

Washington: A statement by US Treasury Secretary Scott Bessent on Friday has sparked a stir in global energy markets and diplomatic circles. Washington has confirmed that it will no longer extend any waivers on oil imports from Iran and Russia. This decision comes at a time when global oil supplies are already under strain due to ongoing tensions between Iran and Israel.

What did US Treasury Secretary Scott Bessent say?

In an interview with the Associated Press (AP), US Treasury Secretary Scott Bessent strongly stated that renewing the one-time exemption for Iranian oil is out of the question. 

While explaining the reason, Scott Bessent said that the waiver was only given on request of the "vulnerable and poor countries", pointing out that "Russian oil on the water has been largely sucked up". 

“Not the Iranians,” Bessent said. “We have the blockade, and there’s no oil coming out.” 

He explained that the US blockade is preventing oil from flowing out of Iran. Bessant predicted that Iran may be forced to begin shutting down its production wells within the next two to three days, which would be extremely technically and economically damaging to its oil fields.

“And we think in the next two, three days, they’re going to have to start shuttering production, which will be very bad for their wells,” he added.

What about Russian oil?

The US has also made its stance clear on Russia. According to Bessant, there are no plans to renew waivers allowing the purchase of Russian oil and petroleum products at sea. 

Although the US granted waivers on Russian oil sales in March to stabilize the global energy market as crude oil prices surged past $100 per barrel, the US now believes that Russian oil stocks have been largely depleted and no further waivers are needed.

What is impact of the Strait of Hormuz?

The closure of the Strait of Hormuz has already severely affected the global energy market. Referring to last week's meetings of the World Bank and the International Monetary Fund (IMF), Bessant said that many poor and developing countries had appealed to them for help, due to which some concessions were given earlier, but now the return of strict sanctions is certain due to security and diplomatic reasons.