Treasury Secretary Scott Bessent stated in mid-April that the United States would not extend a waiver allowing the sale of Russian oil. Two days later, on a Friday night, the Treasury Department quietly issued another 30-day reprieve.
Ukrainian President Volodymyr Zelensky condemned the exemption, saying: “Every dollar paid for Russian oil is money for war.” Senate Democrats called the 180-degree reversal a “shameful” decision.
Then on Friday, Bessent told The Associated Press that the United States did not plan to renew the exemption for Russian oil sales again. The current exemption ends May 16.
The about-face in Russian oil sanctions underscored the messy state of American statecraft as the Trump administration faces the fallout from the war he and Israel started with Iran. While the United States was once able to use its financial power to cripple the economies of its adversaries, countries like Russia and Iran have been using their influence in energy markets to fight back. That has forced the Treasury Department, which oversees the U.S. sanctions program, to improvise.
The Trump administration launched a series of sanctions on Friday, targeting 40 shipping companies and vessels it identified as part of Iran’s so-called shadow fleet of tankers, as it expanded its efforts to cripple the Iranian economy. The administration also imposed sanctions on an independent Chinese refinery, the Hengli Petrochemical Refinery, which is one of Iran’s largest customers for crude oil and other petroleum products.
At a Senate hearing last week, Bessent said the decision to extend Russia’s license came after developing countries pressured him to keep more Russian oil on the market while they were in Washington for the spring meetings of the International Monetary Fund and the World Bank.
“I thought we wouldn’t do it,” Bessent said, but added that poor countries have been struggling with global oil shortages.
The White House and the Treasury Department did not comment on whether the decision to continue easing sanctions on Russia came directly from President Trump.
Sanctions relief has been filling Russia’s coffers with, by some estimates, up to $200 million a day, undermining years of work by the United States and its Western allies to make it harder for Moscow to pay for its war in Ukraine.
“You don’t need to read ‘The Art of War’ to know that helping your adversaries make money while you’re at war is a terrible idea,” Sen. Chris Coons, D-Delaware, said while questioning Bessent at Wednesday’s hearing. “No country has benefited more from this war than Russia,” Coons added, noting that the country’s revenue also helps support Iran militarily.
The strategy toward Iran has been equally confusing. Last month, the United States granted a 30-day waiver allowing the sale of Iranian oil, arguing it would help curb global oil prices while preventing the Iranians from profiting by blocking the Strait of Hormuz. But this month, the Trump administration changed course, letting the sanctions waiver expire and embarking on “Operation Economic Fury,” with new sanctions against Iran. The US military also extended its blockade to ships entering and leaving Iranian ports to waters around the world.
Bessent has compared the initiative to a financial bombing campaign. Last week, he and Trump emphasized the economic pressures they are putting on Iran. They have argued that Iran will be unable to store any more oil within days and will be forced to shut down its wells, leading to their possible eventual failure and causing an economic collapse.
“It’s kind of a whiplash in terms of policy,” said Jennifer Kavanagh, senior fellow and director of military analysis at Defense Priorities, a foreign policy think tank in Washington. “All this back and forth is evidence that the Trump administration did not expect this to last this long.”
Previously, “the main vector of pressure” was military action, and the expectation seemed to be that bombing would force Iran to capitulate, he said. But as the fighting dragged on, raising the risks of war, the notion of a military escalation became less acceptable and Trump had already “rhetorically escalated to the max,” with his threat to wipe out Iranian civilization before a ceasefire, he said, leading to a focus on the economy.
Iran complicated the US sanctions strategy by blocking the Strait of Hormuz and engaging in economic warfare by military means.
An analysis by Lloyd’s List, the shipping intelligence firm, noted there are “signs of disruption to Iran’s shadow fleet operations” amid the US global blockade, with some tankers turning, diverting or stopping since its imposition. But ship tracking information also showed that other tankers linked to Iran were actively sailing.
On Thursday, the Pentagon said U.S. military forces detained and boarded a second authorized tanker carrying oil from Iran in the Indian Ocean, following a similar interdiction on Tuesday.
“But lockdowns are not quick fixes,” Kavanagh said. She has argued that Iran can probably withstand the pressure because they work slowly.
The global lockdown raises legal and operational issues because it has no geographical borders. And the United States can only seize a limited number of ships, suggesting that the practical impact could be “marginal,” he argued, while degrading the United States’ reputation as a defender of international order, as many countries consider such seizures to be piracy.
Edward Fishman, a fellow at the Council on Foreign Relations, said the United States’ haphazard use of sanctions reflects how economic and military warfare are merging. “We don’t have a manual for this kind of economic warfare, which may help explain some of America’s bungling,” Fishman said.
