The United States has decided not to extend a temporary waiver that allowed limited Iranian oil shipments, marking a shift toward stricter enforcement of sanctions amid rising tensions. The waiver, which was set to expire this week, had enabled oil cargoes that were already loaded to reach global markets without triggering penalties.
Officials also confirmed that a similar waiver related to Russian oil was quietly allowed to lapse over the weekend, as per a Reuters report.
Shift Toward ‘Maximum Pressure' Strategy
The move reflects a renewed push by the Trump administration to intensify economic pressure on Iran, particularly over its nuclear programme and support for militants across the Middle East.
The waiver, issued by the US Treasury on March 20, had allowed nearly 140 million barrels of oil to enter global markets, helping ease supply pressures during the conflict with Iran, Treasury Secretary Scott Bessent had said earlier. It is set to expire on April 19, and officials confirmed that a similar waiver on Russian oil shipments, which lapsed over the weekend, was not extended.
The decision marks a shift away from the Trump administration's approach of using sanctions waivers to boost oil supply and ease global prices, which had surged following the US and Israeli conflict with Iran.
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Impact on Global Oil Supply and Markets
Earlier, the waiver had allowed nearly 140 million barrels of oil to flow into global markets, helping stabilise supply during a period of conflict in the region. With its expiration, countries that rely on Iranian oil, such as China and India, may now face disruptions and higher import costs.
The waiver had permitted Iranian oil already in transit to reach buyers without facing penalties, but with its expiry, that protection is set to end. This is likely to create fresh challenges for countries in Asia that depend on such supplies, including China and India, which could now face increased scrutiny and potential penalties, not only for companies but also for banks involved in transactions.
Washington has indicated it may impose secondary sanctions on entities dealing with Iranian oil, even beyond its borders. As a result, major importers may be forced to seek alternative sources, potentially driving up costs for refiners and consumers alike. The development comes at a time when oil markets are already strained, with prices having surged by over 50% since the conflict began, although the waiver had temporarily eased supply pressures by allowing significant volumes to enter the market.
Recently, two sanctioned supertankers carrying Iranian crude have anchored near Indian ports, marking what could be the first such shipments to reach the country in nearly seven years. India had halted imports of Iranian oil in 2019 following US sanctions. However, the temporary waiver last month allowed shipments that were already in transit to reach buyers.
Blockade and rising Geopolitical Tensions
The decision comes alongside the enforcement of a US naval blockade targeting maritime traffic to and from Iranian ports, escalating pressure on Tehran amid ongoing tensions. US forces have stated that vessels heading to or departing from Iran's coastline will be intercepted or turned back as part of the operation. While enforcing the blockade, Washington has clarified that ships not linked to Iran will still be permitted to pass through the Strait of Hormuz. The action follows the breakdown of recent negotiations between the two sides, which failed to produce an agreement to end the conflict that began on February 28.
ALSO READ: Oil Cools As US, Iran Weigh More Talks With Blockade In Place; Brent Falls Over 3%
US Flags Banks In China, UAE
Meanwhile, the US has intensified its crackdown on Iran by increasing scrutiny of international banking networks allegedly linked to Tehran's financial flows. As per a source to Reuters, the US Treasury has sent formal communications to countries, including China, Hong Kong, the UAE, and Oman, identifying banks that have allowed Iranian illicit activity.
The move follows findings that Iran routed at least $9 billion through US-linked correspondent banking channels in 2024, reportedly using front companies based in Hong Kong, the UAE and other places.
In the letter, US Treasury Secretary Scott Bessent urged swift action to detect and halt such activities, warning that failure "to avoid further action from Treasury."
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