Sanctions Waivers on Russian and Iranian Oil Are Set to Expire. Here’s What Trump Should Do Next.

Why It Matters

Extending the waivers would fund adversarial regimes and sustain higher oil prices, eroding U.S. leverage and fueling global inflation.

Key Takeaways

• Licenses expire April 11 (Russia) and April 19 (Iran).
• Russia gains ~ $150 M daily; Iran ~ $139 M daily.
• Price cap re‑imposition could curb Russian revenue and prices.
• Escrow accounts restrict Iranian oil proceeds to humanitarian use.
• Coordinated G7 enforcement needed to limit shadow‑fleet evasion.

Pulse Analysis

The Treasury’s short‑term licenses were introduced to plug a supply gap created by Iranian restrictions in the Strait of Hormuz and to keep Asian markets, especially India, from facing acute shortages. In practice, the extra barrels have not offset the broader market squeeze caused by lingering geopolitical uncertainty and OPEC‑plus production decisions, leaving Brent and WTI on an upward trajectory. Moreover, the licenses have unintentionally handed Russia and Iran a daily revenue boost—about $150 million for Moscow and $139 million for Tehran—diminishing U.S. bargaining power in ongoing diplomatic talks.

Re‑imposing the G7‑agreed price cap on Russian crude offers a dual benefit: it curtails Moscow’s earnings while preventing a surge in benchmark prices that hurts import‑dependent economies. The cap, originally set at $48 per barrel and later lowered to $44, remains enforceable through monitoring of shadow‑fleet movements and coordinated sanctions among allies. Asian buyers such as China, India, Vietnam, the Philippines, Sri Lanka and Thailand have shown a willingness to purchase discounted Russian oil, providing the United States with leverage to secure their cooperation in cap enforcement and to keep global supply channels stable.

For Iran, a targeted escrow‑account mechanism can allow limited oil exports while channeling proceeds into accounts earmarked for humanitarian goods, thereby denying hard‑currency inflows to the Revolutionary Guard Corps. This approach mirrors past U.S. frameworks that required importers—currently Japan, South Korea and potentially India—to hold payments in domestic escrow before release. By coupling escrow with strict verification, the administration can maintain market access for essential Iranian crude without empowering the regime, preserving leverage for any forthcoming U.S.–Iran negotiations and reinforcing broader sanctions cohesion with European partners.