U.S. to not renew sanctions waiver on Russian, Iranian oil; India likely to feel impact

U.S. Treasury Secretary Scott Bessent on Wednesday said Washington will not renew the sanctions waiver on Russian and Iranian oil that had temporarily allowed countries, including India, to purchase it. Notably, the move could significantly impact India, as both Russia and Iran are among its major sources of oil imports. 

“We will not be renewing the general licence on Russian oil, and we will not be renewing the general licence on Iranian oil. That was oil that was on the water prior to March 11, so all that has been used,” Bessent told reporters during a press briefing at the White House. 

Earlier on March 15, the U.S. issued a 30-day sanction waiver to India to buy oil from Russia despite ongoing sanctions due the war in Ukraine. However, a few days later, the U.S. extended the sanctions waiver to several other countries. The waiver expired on April 11. 

Threats of secondary sanctions on Iranian oil buyers  

The U.S. not only refused to renew the sanction waiver but also threatened to impose secondary sanctions on the countries that continue to import oil from 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,” Bessent said. The Donald Trump administration also expected China to halt such purchases as Washington moved to enforce a maritime blockade on Iran. 

What are the secondary sanctions? 

The secondary sanctions are the economic penalties issued against the countries, the companies, or the banks dealing with a country that is itself under U.S sanctions. Thus, a country can come under the ambit of such secondary sanctions, irrespective of the fact that it is not specifically named for being sanctioned.  

The sanction can be in the form of denying the use of U.S. financial infrastructure, limitations on transactions in U.S dollars, or denial of licence for business operations in the U.S.  

Intensifying pressure on Tehran 

The move to end the waiver, along with the threat of fresh sanctions, especially on Iranian oil, reflects the Donald Trump administration’s push for a more economically focused strategy to pressure Tehran instead of relying only on military action.  

Bessent added, “Iranians should know that this is going to be the financial equivalent of what we saw in the kinetic activities.” 

A U.S. 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.