Full Breakdown
Treasury Ends Oil Waivers for Russia, Iran, Targets Chinese Refinery
4/26/2026, 12:26:55 AM
Background & Timeline
U.S. strikes on Iran in February prompted Tehran to close the Strait of Hormuz, which carries ~20 % of oil. Crude prices rose above $100 per barrel, leading the Treasury to grant waivers for Russian and Iranian oil at sea. Authorizations expired April 11; an extension on April 17 kept Russian waiver active until May 16. On April 24-25, Treasury Secretary Scott Bessent announced no further renewals.
Key Actors
Scott Bessent led reversal; Maros Sefcovic raised concerns. Sanctions target Hengli Petrochemical (Dalian), a 400,000-bpd Chinese refinery, and ~40 Iranian-linked shipping firms. Over ten low-income countries asked for continued waiver relief. Iranian oil-shipping magnate Mohammad Hossein Shamkhani was previously sanctioned.
Data Highlights
Strait of Hormuz carries ~20 % of oil. Hengli’s refining capacity: ~400,000 bpd. $344 million in cryptocurrency tied to Tehran seized by U.S. authorities. The waiver extension covered Russian oil on vessels as of April 17; expires May 16. Oil price spike above $100 per barrel triggered the waivers.
Official Statements & Responses
Bessent told reporters will not renew the waivers, citing a blockade that halted Iranian output, warning wells could shut soon. He noted that Russian oil already at sea had largely been pumped up and vulnerable nations’ pleas would not change the decision. The Treasury announced secondary sanctions on Hengli and shipping network, warning banks in China, Hong Kong, UAE, Oman of “stern” measures. Sefcovic said relief was driven by an “extremely difficult” situation for low-income oil-importing countries and will not be repeated.
Criticism & Opposition
Liu Pengyu, a spokesperson, condemned the sanctions, arguing they “undermine international trade order and rules, disrupt economic and trade exchanges, and infringe upon legitimate rights and interests of Chinese companies and individuals.”
Why It Matters
Ending the waivers cuts a revenue source for Tehran, forcing shutdowns and tightening supply. Targeting Hengli signals a U.S. push to choke Iran’s oil earnings via markets. Vulnerable nations risk fuel shortages, policymakers balance stability with pressure.
Verbatim Quotes
- “We have the blockade, and there’s no oil coming out.” — Scott Bessent, Treasury Secretary
- “More than 10 of the most vulnerable and poorest countries came to me and said, ‘Can you help?” — Scott Bessent, Treasury Secretary
- “that if you are buying Iranian oil, that if Iranian money is sitting in your banks, we are now willing to apply secondary sanctions, which is a very stern measure.” — Scott Bessent, Treasury Secretary
- “undermines international trade order and rules, disrupts normal economic and trade exchanges, and infringes upon the legitimate rights and interests of Chinese companies and individuals.” — Liu Pengyu, Spokesperson
What’s Next
The waivers expire May 16, after which sanctions on Russian and Iranian seaborne oil will take effect. The Treasury will enforce secondary sanctions on the Chinese refinery and shipping firms and maintain diplomatic outreach to vulnerable nations to mitigate fuel shortages.
