Brussels warns US move on Russian oil could boost Moscow’s revenues

Brussels has criticised Washington’s decision to extend a sanctions waiver on Russian oil sales, warning that the move risks boosting Moscow’s revenues amid rising global energy prices linked to the Iran war.

Valdis Dombrovskis said on Tuesday, May 19, that the European Union does not support easing pressure on Russia under current conditions. Speaking to reporters ahead of a meeting of G7 finance ministers in Paris, he stressed that the timing of the US decision was inappropriate.

“From the EU point of view, we do not think that this is the time to ease pressure on Russia,” Dombrovskis said.

“In fact, Russia is the one which is gaining from the war in Iran and the increase in fossil fuel prices,” he added. “Correspondingly, if anything, we need to strengthen that pressure.”

His comments followed an announcement by Scott Bessent, who said on Monday night that the US would extend for another 30 days a sanctions waiver covering Russian oil shipments already at sea.

Bessent said the measure “will help stabilise the physical crude market and ensure oil reaches the most energy-vulnerable countries”. He added that it would “also help reroute existing supply to countries most in need by reducing China’s ability to stockpile discounted oil”.

The extension marks the second 30-day renewal of a waiver first introduced in March, as the administration of Donald Trump attempts to manage a surge in oil prices following the US-Israeli attack on Iran in late February.

The conflict, now under a fragile ceasefire, has involved repeated strikes on energy infrastructure across the Middle East. It has also resulted in what amounts to a dual blockade by Iran and the US in the Strait of Hormuz, a vital chokepoint that previously handled around one-fifth of global oil and gas supplies.

Rising energy prices have significantly benefited Russia’s economy, which relies heavily on fossil fuel exports and has faced multiple rounds of Western sanctions since its full-scale invasion of Ukraine in 2022.

According to the Centre for Research on Energy and Clean Air, Russia’s fossil fuel export revenues reached €733 million per day in April, the highest level in two and a half years.

Oil markets remained volatile on Tuesday morning after Trump said he had called off a planned attack on Iran following appeals from Gulf leaders. Brent crude was trading at about $110 per barrel, roughly $40 higher than before the war began.

By Tamilla Hasanova