The United States Secretary of the Treasury, Scott Bessent, has stated that the country will not extend the general licence that previously permitted limited transactions involving Russian and Iranian oil. This announcement was made during a media briefing on April 16, in Washington DC. Bessent clarified that the licence allowed for oil transactions involving petroleum that was already on the water prior to March 11, but confirmed that all such oil has already been utilised.
New Sanctions Imposed on Iran’s Oil Infrastructure
In line with its decision to not renew the general licence, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has introduced new sanctions targeting what it describes as the “illicit oil transportation infrastructure” of Iran. This includes sanctions against approximately two dozen individuals, companies, and vessels associated with Iranian oil shipping activities. The sanctions reportedly focus on a network linked to Mohammad Hossein Shamkhani, who is said to be affiliated with a senior adviser to Iran’s former Supreme Leader, Ali Khamenei.
Scott Bessent emphasised that the measures are part of a broader commitment by the US administration to dismantle Iran’s smuggling operations and terrorist proxy networks. The sanctions aim to intensify economic pressure on Tehran, particularly within the energy sector, as the region continues to experience instability and supply disruptions.
Previously, the Treasury Department indicated that it would not extend the temporary sanctions relief that had been provided for Iranian-origin crude oil and petroleum products. This initial measure was introduced in March to alleviate immediate supply concerns and permitted the sale of oil that had already been loaded onto vessels before March 20. The announcement about the sanctions underscores the US commitment to maintaining maximum pressure against Iran.
Expiry of Temporary Authorisation for Iranian Oil Sales
The Treasury’s recent statement confirms that the temporary authorisation allowing the sale of Iranian oil will soon lapse and will not be renewed. This authorisation, which was announced on March 21, permitted transactions involving Iranian-origin crude oil loaded on vessels by March 20. The validity of this temporary measure extends until April 19, 2026, but the prohibitive stance will return once the licence expires.
The US Treasury Department has publicly asserted that it is aggressively pursuing what it terms “Economic Fury” to apply maximum pressure on Iran. The department has warned global financial institutions of the need to abstain from facilitating Iran’s illicit activities. Institutions engaged in supporting Iran could face repercussions, including secondary sanctions aimed at foreign financial entities.
As the situation with Iran remains volatile, marine traffic in strategic waterway passages continues to be restricted, posing added challenges to global energy supplies and impacting diplomatic relations. The US administration’s reinstatement of stringent sanctions reflects a decisive pivot back to its earlier policy framework against Iran, ending the previously temporary easing applied to transactions involving Iranian oil.