The U.S. Treasury Department has issued a new sanctions wind-down authorization, enabling certain Russian oil cargoes currently at sea to complete their journeys. This decision comes amid disruptions to global energy markets related to rising tensions around the Strait of Hormuz. The authorization, released by the Treasury’s Office of Foreign Assets Control (OFAC), permits necessary transactions for the sale, delivery, or offloading of Russian crude oil or petroleum products already loaded on vessels, remaining effective until April 11.
This license allows for routine maritime services essential for the completion of these voyages, including activities such as vessel management, insurance, and piloting. However, it does not authorize transactions involving Iran, except when strictly needed to finalize the deliveries specified in the authorization.
This measure follows a trend that emerged after Western sanctions against Russian energy exports were imposed in the wake of Moscow’s invasion of Ukraine in 2022. Initially, sweeping restrictions were introduced alongside temporary licenses allowing already loaded cargoes to be delivered, which evolved into the G7 price cap system designed to keep Russian oil flowing under certain conditions.
The latest authorization arrives as the energy sector faces significant challenges due to a sharp decline in shipping through the Strait of Hormuz, a crucial route for global oil trade. Attacks linked to the escalating U.S.-Israel conflict with Iran have led to increased risks, prompting shipowners and insurers to retreat, drastically reducing maritime traffic in the region. Energy analysts warn that prolonged disruptions could result in one of the most severe supply shocks the oil market has ever encountered.
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