Treasury Secretary Scott Bessent declared 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 apostasy, saying: “Every dollar paid for Russian oil is money for the war.” Senate Democrats called the 180-degree turnaround a “shameful” decision.
Then, on Friday, Mr. Bessent told The Associated Press that the United States did not plan to renew the exemption for the sale of Russian oil a second time. The current dispensation ends on 16 May.
The U-turn on Russian oil sanctions underscored the haphazard state of American statecraft as the Trump administration confronts the fallout from the war it and Israel started with Iran. While the United States could once use its economic might to cripple the economies of adversaries, countries such as Russia and Iran have used 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 rolled out a blitz of sanctions on Friday, targeting 40 shipping companies and ships it identified as part of Iran’s so-called shadow fleet of oil 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, Mr. Bessent said the decision to extend Russia’s license came after developing countries lobbied him to keep more Russian oil on the market while in Washington for the spring meetings of the International Monetary Fund and the World Bank.
“It was my belief that we would not,” said Mr. Bessent, however, added that poor countries have struggled with the global shortage of oil.
The White House and the Treasury Department had no comment on whether the decision to continue easing the Russian sanctions came directly from President Trump.
The sanctions relief has by some estimates filled Russia’s coffers with as much as $200 million a day, undermining years of work by the United States and Western allies aimed at making it harder for Moscow to pay for its war in Ukraine.
“You don’t have to read ‘The Art of War’ to know that it’s a terrible idea to help your adversaries win money while you’re at war,” Senator Chris Coons, Democrat of Delaware, said while questioning Mr. Bessent at the hearing on Wednesday. “No country has profited more from this war than Russia,” added Mr. Coons, noting that the country’s revenues also help support Iran militarily.
The strategy toward Iran has been equally confused. The United States last month granted a 30-day waiver allowing the sale of Iranian oil, arguing that 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 reversed course, letting the sanctions relief expire and launching “Operation Economic Fury” with new sanctions against Iran. The US military also extended its blockade of vessels entering and exiting Iranian ports to the waters of the wider world.
Mr. Bessent has compared the initiative to a financial bombing campaign. Last week he and Mr Trump emphasized the economic pressure they are putting on Iran. They have argued that Iran will not be able to store more oil in a matter of days and will be forced to shut down its wells, leading to the eventual failure of the wells and driving economic collapse.
“It’s kind of a whiplash in terms of policy,” said Jennifer Kavanagh, a senior fellow and director of military analysis at Defense Priorities, a foreign policy think tank in Washington. “This whole back and forth is proof that the Trump administration didn’t expect this to last this long.”
In the past, “the primary vector of pressure” was military action, and the expectation appeared to be that bombing would force Iran to capitulate, she said. But as the fighting has dragged on and the stakes of the war increased, the idea of military escalation became less palatable, and Mr Trump had already “escalated rhetorically to the max”, with his threat to wipe out Iranian civilization before a ceasefire, she 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 naval operations” amid the global US blockade, which has seen some tankers turned, diverted or paused since it was imposed. But vessel tracking information also showed that other Iran-linked tankers were actively sailing.
On Thursday, the Pentagon said US military forces stopped and boarded another sanctioned tanker carrying oil from Iran in the Indian Ocean, following a similar ban on Tuesday.
“But blockades are not quick fixes,” Ms Kavanagh said. She has argued that Iran can probably withstand the pressure because they work slowly.
The global blockade raises legal and operational questions because it has no geographical boundaries. And the U.S. can only seize so many ships, suggesting the practical impact could be “marginal,” she argued, while also tarnishing the U.S.’s reputation as an upholder of international order, since many countries view such seizures as piracy.
Edward Fishman, a fellow at the Council on Foreign Relations, said the US’s casual use of sanctions reflects how economic and military warfare are merging. “We don’t have a playbook for this kind of economic warfare that can help explain some of America’s fumbles,” Mr. Fishman.
