The Trump administration will allow a 30-day waiver of sanctions on Iranian oil at sea to expire later this week, two administration officials told Reuters on Tuesday, as the U.S. imposes a blockade on shipments from Iranian ports.
The move signals that “Treasury is going full force on Economic Fury,” on Iran, an apparent reference to Operation Epic Fury, the U.S.-led military campaign against the country, one of the officials said.
The Trump administration has long said it is applying “maximum pressure” on Iran over its nuclear program and support for militants across the Middle East, though sanctioned oil has continued to reach China.
The waiver, which the Treasury Department issued on March 20, allowed some 140 million barrels of oil to reach global markets and helped relieve pressure on energy supply during the war on Iran, Treasury Secretary Scott Bessent said last month. The waiver is set to expire on April 19.
The move to not renew the waiver on oil follows lawmakers from both political parties criticizing the administration for temporarily relaxing sanctions on Tehran and Moscow, while the U.S. and Israel are at war with Iran and as Moscow continues its war with Ukraine. The U.S. also did not renew the waiver on Russian oil at sea which expired on Saturday, the sources said.
Washington has a range of penalties it can apply to institutions involved in illicit activities with Iran such as buying its oil, including secondary sanctions, one of the sources said.
“In addition, with the snapback of U.N. sanctions on Iran, and its history of trying to hide behind seemingly legitimate activity to conduct its illicit conduct, any activity with Tehran could trigger additional sanctions,” the person said.
Treasury Secretary Scott Bessent told reporters earlier that the U.S. blockade of the Strait of Hormuz would ensure that no Chinese ships or others would be allowed to pass.
“So they’re not going to be able to get their oil. They can get oil. Not Iranian oil,” Bessent said, adding that China had been buying more than 90% of Iranian oil and it constituted about 8% of their annual purchases.
(Reporting by Timothy Gardner; Editing by Chris Reese and Nia Williams)