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As a result of its recent conflict with the United States and Israel, Iran has all but closed passage through the Strait of Hormuz, leading to supply disruptions and a global spike in oil prices. In response, the U.S. recently implemented measures to offset these increases, including temporarily lifting sanctions on certain Russia-origin crude oil and petroleum products. However, this move is not without complications for market participants.
As background, the U.S. had issued numerous different sanctions on crude oil and petroleum products originating in the Russian Federation, many of which were imposed in response to the Russia-Ukraine conflict. These sanctions and counterpart measures initiated by major trading partners have led to Russian oil cargoes being stuck at sea. To read about some of these Russia-related sanctions, please see the following Lewis Brisbois Client Alerts:
The New Year Brings Substantial Russia-Related Sanctions on the Russian Energy Sector
New OFAC Sanctions Adversely Impact Rosneft and Lukoil: Extra Diligence Required
OFAC Issues Warning on Practices that Could Result in Evasion of Price Cap on Russian Crude Oil
On March 5, 2026, the United States Department of Treasury’s Office of Foreign Assets Control (“OFAC”) issued General License 133, authorizing the purchase and delivery of Russian oil to India for a thirty-day period ending April 4, 2026. On March 12, 2026, OFAC went further, issuing General License 134, which temporarily authorizes, through April 11, 2026, transactions involving Russia-origin crude oil and petroleum if loaded onto vessels blocked under various sanctions authorities prior to March 12, 2026, as well as incidental transactions such as docking and anchoring of applicable vessels. (This measure also required a temporary waiver of U.S. requirements that goods shipped between U.S. ports travel on U.S. vessels pursuant to the Merchant Marine Act of 1920 (better known as the Jones Act).)
However, these U.S. licenses were not matched by commensurate actions from the U.K. and E.U., which had similarly imposed heavy sanctions on trading in Russian oil. In fact, these countries appear to be strongly opposed to the U.S.' temporary relaxation of these sanctions. This lack of international coordination on sanctions regimes creates potential compliance risks – or at a minimum, undesirable complexities – for shippers operating in markets governed by differing requirements.
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