America has extended the previous exemption from sanctions on Russian oil coming via sea by one month. The order in this regard was issued by the ‘Office of Foreign Assets Control’ (OFAC) of the US Treasury Department on Monday night. According to the order, the exemption from sanctions on Russian oil found in the sea on or before April 17 has been extended till June 17. Earlier, the US had exempted India from buying Russian oil for a period of one month, effective from March 5. This deadline expired on 11 April. Subsequently, this order was extended for another month, with effect from April 17. The main objective behind this decision of America is to ensure more availability of oil in the international market and help in controlling the rising oil prices. The US extended this deadline on Monday; On the same day, India said that – whether or not it gets sanctions relief – it would not stop buying oil from Russia.
**What has America announced?**
US Treasury Secretary Scott Besant wrote on the social media platform ‘X’ that this decision will provide additional relief to various countries. Where necessary, they will also be granted specific special licenses on an individual basis. The move is aimed at maintaining stability in the global crude oil market and ensuring that oil reaches the countries that need it most. He further said that this would reduce China’s ability to store large amounts of cheap Russian oil, allowing existing oil supplies to be diverted to countries that need it.
Before Besant’s statement, India had insisted that it would continue to buy oil from Russia, whether the US grants it a waiver or not. For India, affordable prices and energy security are of paramount importance. Sujata Sharma, joint secretary in the petroleum ministry, said: “With regard to the US waiver on Russia, I would like to clarify that we have consistently purchased oil from Russia in the past – before the waiver, during the waiver period, and we will continue to do so now.” He emphasized that India’s decisions on crude oil purchases are primarily driven by commercial considerations and the availability of adequate supplies. He added, “For us, the basis of our purchasing decisions is fundamentally a matter of commercial logic.”
**When is the discount for buying Russian oil applicable?**
In a license issued on April 17, the US Treasury Department’s Office of Foreign Assets Control (OFAC) said that Russian oil and petroleum products loaded on tankers – even if they are being transported on ships subject to sanctions – can be purchased and received by most countries until May 16, provided they are loaded by the morning of April 17. This relaxation has now been extended till June 17. A similar situation had arisen in April also; The waiver had also expired at that time, and the US initially said it would not extend it. However, a few days later, he reinstated the measure. The initial relaxation given in March had expired on April 11 and was later extended till April 17.
Oil prices have soared due to the effective closure of the Strait of Hormuz due to the US blockade on Iran. Earlier, about 20 percent of the world’s crude oil was supplied via this route. Experts believe that the closure of the Strait of Hormuz has disrupted the supply of oil from the Gulf countries. To make up for the shortfall – and possibly due to pressure from countries that buy Russian oil – the US has extended the waiver deadline. The move is part of a broader effort by the Trump administration to stem the steady rise in international oil prices. If oil prices rise, gasoline and diesel prices in the US will also rise, potentially impacting this year’s midterm elections.
**Why has this decision of US been criticized?**
The purpose of this US decision is to provide economic benefits to Russia. Critics of this decision argue that Russia will use these financial benefits to fuel its ongoing conflict with Ukraine. There were similar criticisms when the US previously allowed Iran to buy oil. It is worth noting that the US has increased the exemption to buy Russian oil on two separate occasions, but it has not increased the exemption to buy oil from Iran even once. However, defending his decision during a congressional hearing last month, Treasury Secretary Mnuchin said that at least 10 countries had specifically requested him to extend the exemptions. He said that if the rebate is not extended, crude oil prices could reach $150 per barrel. However, he later told news agency AP that he would not extend this exemption again. But, changing its stance, America has once again increased this exemption. Ahead of the US move, Sujata Sharma, Joint Secretary in the Petroleum Ministry, had said during a press conference in Delhi on Monday that India has been buying oil from Russia in the past, has been doing so during the waiver period and is doing so now. So, the main thing is whether the oil companies are making profits or not. India has consistently maintained that there is no need for a US waiver to buy Russian oil.
