— Even before the decision to introduce exceptions was made, sanctioned Russian oil was hitting the market because the Trump administration has not put in place any mechanisms to prevent Russia from circumventing sanctions for over a year, either in terms of oil sales or key purchases for the Russian war machine, says a Democratic adviser in the US Senate.
The Treasury Department suspended sanctions on Russian oil a month ago in an attempt to lower oil and gas prices following Iran's effective blockade of the Strait of Hormuz. These sanctions on Rosneft and Lukoil, imposed in October, have reduced Russian oil profits.
— It made no sense to give the Russians a reduced tariff, says DANIEL FRIED, a retired former assistant secretary of state for Europe and former US ambassador to Poland, who worked for both Republicans and Democrats. In his opinion, the administration could oblige Russia to place oil revenues in an escrow account that would be used only for food and medicines, and also lower the price limit on oil to limit the flow of money to Russia.
“To solve the problem of getting oil to market without maximizing Russian profits, both of these steps were fully justified, and the Trump administration did not take either one,” he added.
The Treasury Department did not respond to our questions about the sanctions suspension, but cited Treasury Secretary SCOTT BESSENT's March defense of the decision as a “precisely targeted, short-term action.” He noted that most of Russia's oil profits come from taxes collected during production, so allowing the sale of oil already transported by ship has a marginal impact.
It was unclear until Saturday whether the sanctions exception would be maintained. Senator JEANNE SHAHEEN, Senate Minority Leader CHUCK SCHUMER, and Senator ELIZABETH WARREN (all Democrats) on Friday urged the administration not to renew the Treasury Department's general license, arguing that it allowed “Russia and its collaborators” to obtain more than $4 billion.
An aide to Democratic senators emphasized that the expiration of the exception, the general license, is hardly a cause for celebration.
“Now this license has further motivated all of Russia's intermediaries to load sanctioned oil in anticipation of another profitable exception or because the Trump administration is signaling its willingness to turn a blind eye to Russian oil to mitigate the effects of its Iran policy,” he said.
Ukraine can breathe at least for a while.
— We support the United States' decision not to extend the exception to sanctions against Russia, said Vladislav Vlasiuk, representative of the President of Ukraine for sanctions. — Reducing Russia's revenues from oil and gas is a key tool supporting peace efforts.
However, after President DONALD TRUMP announced a maritime blockade of the strait, oil prices are expected to rise even more. A bill pushed by Sen. LINDSEY GRAHAM (R-S.C.) to impose secondary sanctions on Russia is still stuck in Congress. The Treasury Department has not commented on whether it is considering reintroducing the exception.
“The situation is likely to get worse before it gets better unless the regime gives in, which seems unlikely,” says retired Vice Admiral JOHN W. “FOZZIE” MILLER, former commander of the US Fifth Fleet in Bahrain.
