The US Treasury department has extended a waiver allowing US banks to keep processing energy-related transactions without violating Russia sanctions, in the latest sign of the Biden administration’s concerns about further disruptions to energy markets from the war in Ukraine.
As part of the original sanctions package against Russia introduced after the February invasion, the US had issued a waiver for American banks to keep processing energy-related transactions involving third countries until June 24.
On Tuesday, the US Treasury department extended that until December 5.
“Today, Treasury renewed its authorisation of energy transactions to align our regulations with the implementation timing of the EU’s ban on crude oil. This licence will provide for an orderly transition to help our broad coalition of partners reduce their dependence on Russian energy as we work to restrict the Kremlin’s revenue sources,” the Treasury said.
The move comes as the US administration has grown increasingly concerned about high energy prices and their impact on the US economy, and is seeking ways to curb further rises. However, it could spark a backlash from some on Capitol Hill who have been arguing for the waiver to end.
Andy Barr, a Kentucky Republican who serves on the House financial services committee, had been urging Janet Yellen, Treasury secretary, to end the waiver, saying Russia’s energy sector was still experiencing a “boom”.
“Russia’s energy sector is bankrolling Putin’s war machine in Ukraine, financing the killing of innocent civilians to include women and children in Ukraine,” Barr said in a statement on Tuesday.
“It is inexplicable for Treasury to continue this waiver any longer,” he added.