NARRATIVE: Russian Oil Flows Freely as Washington Closes the Waiver Tap

Introduction: On June 17, America Let Its Tolerance Expire

A waiver held upright by inertia

On June 17, 2026, without fanfare, the United States allowed General License 134C to expire — the third consecutive 30-day waiver granted by the U.S. Treasury to ease sanctions on Russian oil shipped by sea. No press conference, no solemn statement. Just the bureaucratic silence of a deadline quietly passing. But behind that silence lies a burning geopolitical reality: while Washington dithered with successive waivers, Moscow was pocketing billions of dollars in oil export revenues at record levels.

The genesis of this waiver is itself revealing of the contradictions in American foreign policy under Trump. When the war against Iran clogged the Strait of Hormuz and drove crude prices skyward, Treasury Secretary Scott Bessent justified General License 134C by invoking the need to protect energy-vulnerable nations. Read: protecting countries that buy Russian oil because they cannot afford the alternatives. A humanitarian logic that, in practice, functioned as an indirect subsidy to Putin's war machine.

The Iran war as the triggering context

General License 134C was born of a crisis within a crisis: the conflict between the United States and Iran in spring 2026 had paralyzed maritime traffic through the Strait of Hormuz, through which roughly 20 percent of global oil consumption transits. Faced with soaring prices, Washington decided that allowing Russian oil to flow freely was preferable to a global energy crisis. It was a pragmatic decision — understandable in an emergency — but one that opened the door to three months of tolerance that Moscow exploited with remarkable efficiency.

The end of hostilities with Tehran and the reopening of the Strait of Hormuz changed the equation. Trump said it himself at the G7: "Oil is flowing now." Which means: the justification for the waiver has evaporated. Which also means: the logical next step is tightening sanctions. The question is whether the Trump administration will have the consistency to sustain that logic in the weeks and months ahead.

The Waiver Mechanics: Three Times 30 Days — For What?

General License 134C: anatomy of a repeat tolerance

General License 134C was not a one-off exception. It was the third consecutive renewal of the same 30-day waiver, renewed each time after the U.S. Treasury had allowed the previous version to expire — twice — before resurrecting it. This hesitant choreography reflects a genuine tension within the Trump administration: on one side, the sanctions hawks who want to choke off Russian oil revenues; on the other, the pragmatists who fear the impact of rising crude prices on the American and global economy.

The result of this institutional hesitation was a perfectly incoherent signal sent to markets, allies, and Moscow. Each renewal of the waiver was read as a capitulation by Washington before the realities of the oil market. Each expiration was framed as a show of resolve. In between, Russian exporters kept delivering, Indian refiners kept buying, and Kremlin coffers kept filling. General License 134C is the perfect symbol of half-measures sanctions policy: constraining enough to irritate markets, not coherent enough to change Moscow's behavior.

The real impact on global oil markets

Oil markets received Washington's contradictory signals with a mixture of confusion and pragmatic adaptation. Operators quickly understood that waivers would be renewed — and planned their purchases accordingly. Russia, for its part, used these 90 days of visibility to consolidate commercial relationships with Asian clients, negotiate long-term contracts with Indian refiners, and reinforce the logistics infrastructure of the shadow fleet. In other words, Washington gave Moscow time — the most precious asset in a period of economic warfare.

The true measure of the waiver's impact will be seen in the months following its expiration on June 17. If Russian exports drop significantly, the advocates of firmness will have been vindicated. If they hold via the shadow fleet and Asian markets, the skeptics will have been confirmed. Either way, the policy of successive waivers will have demonstrated the limits of a sanctions strategy that hesitates between resolve and flexibility.

The Numbers That Sting: 6 Million Barrels a Day for Russia

Exports at record levels during the grace period

While the American debate on renewing or letting the waiver expire played out, market data told an unequivocal story. In May 2026, Russia was exporting an average of 6 million barrels of crude oil per day, according to S&P Global Commodities at Sea — compared to 4.9 million in February. A rise of over 22 percent in just a few months. Russian fossil fuel revenues reached approximately 726 million euros in May, or about $832 million, up 2 percent month-on-month, according to the organization CREA. Moscow was collecting more each week than some countries spend in a year on their defense.

The structure of these exports also reveals a major geopolitical pivot. While Russian exports to China declined — with maritime volumes down 23 percent in May compared to the previous month — it was India that was filling and exceeding the gap. Indian purchases of Russian crude were on track to reach an all-time record by mid-June, averaging 2.35 million barrels per day according to Kpler, surpassing the previous record of 2.16 million set in May 2023. The Paradip refinery received its largest Russian cargo in two years. These are not abstract figures: they are the daily funding of Putin's army.

726 million euros in one month: the Kremlin's cash machine

The 726 million euros raked in by Russia in May 2026 from fossil fuel exports represent more than 24 million euros per day. To put this in perspective: it is more than the European Union disbursed in direct military aid to Ukraine in some months since the conflict began. Every day that sanctions fail to fully achieve their objectives, Putin has additional resources to pay his soldiers, maintain his equipment, and prolong a war that the free world hopes to see end.

These oil revenues have another direct consequence: they allow Moscow to fund the acquisition of military components from its suppliers — mainly Chinese — despite Western embargoes. Oil money funds the drones, missiles, and munitions that fall daily on Ukrainian cities. When you buy Russian oil — or tolerate others doing so — you are indirectly financing this cycle of destruction. That is why the waiver's expiration on June 17 was a moral necessity as much as a strategic decision.

India at the Center: The World's Second-Largest Buyer of Russian Fossil Fuels

New Delhi: between economic pragmatism and strategic complicity

India was the world's second-largest buyer of Russian fossil fuels in May 2026, with imports of 5.8 billion euros according to CREA, of which 4.8 billion in crude oil alone. In absolute value, only China bought more. The relationship between New Delhi and Moscow on oil markets is not new — it dates back to the earliest days of the war in Ukraine, when Indian refiners took advantage of the steep discounts offered by Russia to circumvent Western sanctions. But the scale of the phenomenon in May-June 2026 exceeds anything previously observed.

India's total crude oil imports surged 8 percent month-on-month, driven largely by a 21 percent increase in Russian volumes. Indian state-owned refiners, which had suspended Russian purchases toward the end of 2025, resumed acquisitions in March 2026 — and quickly made up for lost time with enthusiasm. This massive return of Indian buyers to the Russian crude market illustrates the fundamental gap between the Western sanctions strategy and the economic realities of the half of the planet that chose not to join this front.

New Delhi between Washington and Moscow: the diplomacy of equidistance

Modi has met with Putin multiple times since the war began, while maintaining cordial relations with Washington and participating in Western multilateral forums. This equidistance policy — bought in part through discounts on Russian oil — allows India to maximize its economic interests while preserving its diplomatic room for maneuver. From the Indian perspective, it is strategy. From the Ukrainian perspective, it is economic complicity with the aggressor.

The Trump administration chose, through its successive waivers, not to force India into a hard choice. This is understandable from a geopolitical standpoint — New Delhi is a crucial partner in the Indo-Pacific strategy against China. But that logic has a cost: every dollar of Russian oil bought by India with implicit Washington blessing is a dollar less in the effectiveness of sanctions. Sooner or later, this difficult conversation with New Delhi will have to happen — with respect, but with clarity.

China Pulling Back, but Not Absent: The Shifting Geography of Russian Purchases

Beijing reduces, redistributes, and keeps its options open

The decline in Chinese imports of Russian crude in May 2026 — a drop of 23 percent month-on-month, against a backdrop of a 17 percent fall in all maritime crude imports — should not be read as a gesture of solidarity with the West. It is explained first by cyclical factors: inventory effects, Chinese economic slowdown, and diversification toward other sources. Over the longer term, Russian exports to China remained up 35 percent year-on-year for the first quarter, with volumes unloaded at the Dongjiakou terminal up 144 percent compared to the previous year — a two-year record.

The case of Turkey also illustrates the complexities of the geography of Russian purchases. Turkish imports of Russian Urals crude were expected at roughly 161,000 barrels per day in May, sharply down from the 302,000 averaged between January and April. Ankara was adjusting its purchases in response to political signals — but was still buying 2.8 billion euros worth of Russian hydrocarbons in May. Russia has succeeded in building a sanctions-evasion sales infrastructure that, even if weakened, continues to function. That is the result of four years of patient construction of a war economy.

China as buyer of last resort and pressure lever

The Beijing-Moscow relationship on oil is more complex than simple mutual dependence. Beijing holds considerable leverage: by reducing its purchases of Russian oil, it can exert real economic pressure on Moscow. The May 2026 declines show that this leverage exists and can be used — even if Chinese motivations were probably economic rather than political. For the West, the strategic question is how to persuade Beijing to deploy that leverage deliberately, in a direction favorable to peace in Ukraine.

This scenario remains hypothetical — China has shown no sign of intention to distance itself from Russia out of solidarity with Ukraine. But accumulated economic pressures could, over time, alter Beijing's calculations. A Kremlin too economically weakened to honor its commitments to China — whether in energy exports or in technological partnerships — would become a less valuable partner for Xi Jinping. That is the long-term logic of the Western economic attrition strategy.

Trump at the G7: The Threat of New Sanctions and What It Is Worth

Cannes, June 2026: promises in a luxury palace

At the G7 summit in France in June 2026, President Donald Trump suggested that Washington might now intensify pressure on Russia. His reasoning was straightforward: Iranian oil has been flowing again through the Strait of Hormuz since the end of hostilities with Tehran. In plain terms: if Iranian crude compensates for Russian crude taken off the market, oil prices would not spike and sanctions could return to full effect. "We'll be able to do it because oil is flowing now,"Trump declared according to sources present at the summit. G7 leaders for their part committed to strengthening sanctions on the Russian war economy.

The actual value of these declarations remains to be proven. Trump has a long history of sweeping statements about sanctions that never fully materialize. His European allies, who bear the economic consequences of Russian energy sanctions most directly, have diverging interests depending on member state. And meanwhile, Russia's shadow fleet infrastructure — that phantom fleet of tankers sailing under flags of convenience — continues to funnel crude toward markets willing to receive it. Well-intentioned declarations at the G7 do not dismantle the logistics networks that Moscow has patiently built since 2022.

What the G7 actually promised — and what it can deliver

The G7 commitments from June 2026 cover three axes: strengthening the oil price cap mechanism, accelerated designation of shadow fleet entities, and coordination with third-party countries to limit high-priced purchases of Russian crude. Each of these axes runs into real obstacles. The cap is only effective if non-G7 buyers respect it — which they have no obligation to do. Shadow fleet designations are circumvented by creating new entities. And coordinating with third-party countries requires diplomacy that takes months or years to bear fruit.

What could fundamentally change the equation is an American decision to impose secondary sanctions on buyers of Russian oil exceeding the cap — a measure Washington has been reluctant to take for fear of diplomatic friction with India and China. If Trump takes that step, the G7 declarations will carry concrete significance. If not, they will remain what they have always been: well-crafted communiqués that never quite reach the Kremlin's pockets.

The Shadow Fleet: The Phantom Armada That Mocks the Sanctions

Hundreds of tankers under flags of convenience

One of the great lessons of these four years of economic war against Russia is the unexpected effectiveness of the shadow fleet — that phantom armada of hundreds of tankers operating under flags of convenience from countries like Liberia, the Marshall Islands, or Panama, with owners hidden behind cascades of shell companies registered in the United Arab Emirates, Azerbaijan, Hong Kong, or Turkey. The EU's 20th sanctions package, adopted on June 15, specifically targeted this ecosystem: 24 entities linked to the transport and export of Russian crude were designated, including the company Lukoil-Western Siberia.

But the shadow fleet problem is not simply a matter of blacklists. It is a question of financial and logistical architecture. For every tanker designated, two new ones are deployed under carefully constructed anonymous structures. The European Union banned in January 2026 the import of refined products derived from Russian crude processed in third countries — a measure that the United Kingdom joined in May. But enforcing these rules requires international cooperation that allies struggle to maintain consistently. The shadow fleet thrives in the gaps of that imperfect coordination.

The Russian Economy Under Pressure: Inflation, Recession, and the Illusion of Resilience

The Bank of Russia cuts to 14.25% but the fever will not break

While oil exports were setting records, Russia's domestic economy was showing signs of growing fragility. The Central Bank of Russia lowered its benchmark rate to 14.25 percent in June 2026 — less than the 14 percent expected by the analyst consensus according to RBC. Elvira Nabiullina, the central bank governor, justified the modest size of the cut by citing pro-inflationary risks linked to budgetary spending exceeding projections. In plain terms: the Kremlin is spending so much on its war that the central bank fears an uncontrollable inflationary spiral.

The concrete signals of this economic strain were visible in the daily lives of Russians. In June 2026, at least 53 regions were experiencing fuel shortages, with some gas stations implementing rationing. The price of a liter of gasoline had risen by more than 3 rubles in the Moscow region. On the night of June 18, nearly 200 Ukrainian drones struck Moscow and its surrounding area — the largest attack on the Russian capital since the start of all-out war. A refinery in Moscow's southeast suburbs exploded, with footage circulating around the world. The budget deficit for the first five months of 2026 reached 6 trillion rubles, roughly 61 to 62 billion euros, exceeding the planned annual level by 60 percent. And Putin, at the St. Petersburg forum, was claiming without blinking that the Russian economy remained as robust as the eurozone's.

The EU Strategy: 20 Sanctions Packages and a Change in Duration

From semi-annual to annual: a strong political signal

On June 19, 2026, at the Brussels summit, European Union leaders made a symbolically important decision: for the first time since the start of the all-out war, economic sanctions against Russia were renewed for 12 months instead of the usual 6 months. The spokesperson for European Council President António Costa announced the measure after consultations with Ukrainian President Volodymyr Zelensky. This change in duration — which may seem technical — sends a decisive political message: Europe will no longer debate the merits of sanctions every six months. Moscow can no longer count on European divisions to secure periodic relief.

The 20th sanctions package, adopted on June 15, represented the broadest scope to date. 34 individuals and 47 additional entities were designated, covering the Russian military-industrial complex, shadow fleet logistics networks, Chinese suppliers of military components — notably Shenzhen Minghuaxin and Xinxiang Richful Lubricant Additive Company — and individuals responsible for pro-Russian information manipulation in Europe. High Representative Kaja Kallas summed up the collective ambition of the effort in a characteristically blunt formulation: "Brick by brick, we are crumbling the foundations of the Russian war economy." According to her assessment, sanctions have already cost Russia between 1 trillion and 1.3 trillion euros.

Ukraine's Drone Fleet: Disrupting Russian Oil Infrastructure

Strikes on refineries as economic strategy

It is impossible to understand the context of the oil waiver without integrating the Ukrainian dimension of the economic war against Russia. For several months, Ukraine has been intensifying drone strikes against Russian refineries, ports, and tankers. These attacks have contributed to disrupting Russia's domestic fuel market — one of the direct causes of the shortages in 53 regions and the stock-outs at gas stations. By hitting Russian energy infrastructure, Kyiv applies a simple logic: if international sanctions cannot stop exports, production capacity on the domestic side can at least be degraded.

The massive strike on June 18 against Moscow and its surrounding region — with the explosion of a refinery documented by images broadcast around the world — illustrates the growing sophistication of this strategy. Ukraine is no longer hitting only military targets: it is targeting the economic nodes that fuel the Russian war machine. This strategy complements Western sanctions in ways that diplomats cannot officially replicate. And it reminds the Russian population — through the price of a liter of gasoline — that Putin's war carries a real and growing domestic cost.

The Oil Price Cap: A Tool Blunted by Market Realities

$60 a barrel: a ceiling the market routes around

The mechanism of capping the price of Russian oil at $60 a barrel, put in place by the G7 in December 2022, was supposed to limit Russian revenues while maintaining global supply flows. In May 2026, Russian Urals crude was trading at an average of $82 a barrel — well above the official cap. How is this possible? Because the cap is only applied by the countries that respect it, and the vast majority of Russian oil buyers — India, China, Turkey — are not party to the cap mechanism. Russia sells to the market, not to the Western ceiling.

The result is a sanctions architecture that presents the appearance of rigor while allowing most of the flow to pass through. The European Union has banned Russian oil imports — a commitment honored. The United Kingdom followed in May on refined products. But the 6 million barrels per day that Russia exports no longer go to Europe: they go to Asia, at prices far exceeding the theoretical cap. Moscow has simply redirected its commercial flows toward partners who did not sign the cap agreements. This is the structural limit of sanctions that do not cover the majority of the global market.

Russia-China Trade: $250 Billion and a Growing Dependency

The Sino-Russian drift: figures that tell a new dependency

Behind the oil figures, the Russia-China economic relationship has undergone a spectacular transformation since 2022. Bilateral trade rose from $190 billion in 2022 to nearly $250 billion in 2024, before pulling back slightly to $234 billion in 2025. Russia maintains a trade surplus of over $100 billion with China — but this surplus is largely composed of energy sales whose prices Moscow no longer fully controls, since Beijing is the captive buyer. The dependency is mutual but asymmetric: Russia needs the Chinese market for its energy exports; China needs Russia for its discounted hydrocarbon supplies.

The most revealing fact of this transformation is monetary: 92 percent of Russia-China bilateral trade is now conducted in rubles and yuan — compared to just 25 percent before the 2022 invasion. Moscow has exited the dollar for this crucial commercial partnership. This choice carries profound consequences for Russian foreign exchange reserves, for ruble liquidity, and for Russia's capacity to finance military imports in other currencies. China is now supplying critical military components to Russia — which explains why the EU's 20th sanctions package specifically targeted Chinese companies in this sector.

The Future of Sanctions: Toward a 21st Package and a More Robust Architecture

Kaja Kallas and the doctrine of economic attrition

EU High Representative for Foreign Affairs Kaja Kallas announced that a 21st sanctions package was in preparation. Since all-out war began in February 2022, the European Union has banned the export to Russia of more than 48 billion euros in goods and has banned Russian imports worth 91.2 billion euros. These figures represent 54 percent and 58 percent respectively of 2021 trade volumes — a radical transformation of economic exchanges between the European bloc and Russia. Kallas's strategy is one of economic attrition: not a mortal blow, but progressive erosion that ultimately weighs on Putin's military capabilities and domestic legitimacy.

The challenge of this attrition strategy is its duration. European Union economies have themselves borne the consequences of the break with Russia — particularly on energy, even if dependence on Russian gas has been substantially reduced since 2022. European populations, confronted with energy inflation and sluggish growth, are susceptible to impatience. That is Putin's calculation: hold on long enough for Western resolve to erode. The shift to annual sanctions from June 2026 is a direct answer to that calculation — declaring that Europe does not contemplate loosening its grip in the months ahead.

Conclusion: June 17 — A Deadline That Is Not Enough

The end of the waiver: a first step in a strategy still being built

The expiration of General License 134C on June 17, 2026 is a necessary measure, but an insufficient one. It ends a tolerance that allowed Russia to export at record levels during 90 days of American grace. It sends a signal to the market and to allies about Washington's intentions. But it does not stop the shadow fleet, does not bring India back into the sanctions camp, does not close the new trade routes that Moscow has patiently built since 2022. The end of the waiver is a beginning, not a victory.

For this strategy to be effective, Washington will need to coordinate with its G7 allies to strengthen enforcement of the price cap mechanism, engage seriously with New Delhi on its massive purchases of Russian oil, and actively support the European effort to designate shadow fleet entities. The successive waivers will have at least had the merit of revealing the limits of the current system. It is now up to the Trump administration and its European partners to build a more robust, more coherent sanctions architecture — one less susceptible to being routed around by markets that chose not to participate.

The International Response and the Months Ahead: What Could Change

G7, NATO, and the concert of nations under pressure

The months following the waiver's expiration will be revealing of the coherence of the Western strategy. The G7 has promised to strengthen sanctions on the Russian war economy. The European Union is preparing its 21st package. NATO, gathered in Ankara for its June 2026 summit, discussed the implications of the economic war for collective security. But the G7's promises run up against the reality that the majority of Russian oil buyers are not part of that grouping. And 21 European sanctions packages, however well constructed, cannot compensate for the fact that China, India, and Turkey together represent a massive share of global oil demand.

The next decisive step will be Washington's assessment of the post-Iran-war global energy situation. If Iranian oil effectively compensates for the partial withdrawal of Russian oil from accessible markets — as Trump seems to believe — then the room for tougher oil sanctions expands significantly. In that scenario, June 17, 2026 would indeed mark a turning point. In the opposite scenario — if oil markets remain tight or if prices threaten to rise again — the pressure for a new waiver will be intense. And the cycle will start again.

Signed Maxime Marquette, columnist

Columnist's Transparency Box

Editorial positioning

This narrative adopts a critical perspective on the American administration's policy of repeated waivers on Russian oil sanctions. Columnist Maxime Marquette unambiguously supports the Ukrainian cause and regards Russian oil revenues as direct funding of the war against Ukraine. This position shapes the analysis, which is that of a columnist-analyst assuming an argued viewpoint — not that of a neutral observer.

Limitations and uncertainties

Data on Russian oil exports comes from private analysis sources (S&P Global Commodities at Sea, Kpler, CREA) whose collection methodologies vary. Figures on Russia-China trade and Russian revenues in euros are estimates subject to revision. The exact impact of American waivers on Russian policy cannot be measured directly — these are inferences based on available market data. Trump's statements at the G7 are reported according to available secondary sources.

Absence of conflicts of interest

Columnist Maxime Marquette has no links to the oil companies, financial institutions, or government entities mentioned in this narrative. This text is written in complete editorial independence. The word "journalist" is deliberately avoided: the columnist assumes a viewpoint, a conviction, and a voice — that is the intellectual honesty of an analyst who claims not neutrality, but factual truth.

Sources

Primary sources

The National News: Russia's oil windfall outlasts the US's wartime waiver — June 19, 2026

Euronews: Bank of Russia flags risks of faster inflation — June 20, 2026

European Relations: The EU's latest Russia sanctions — June 20, 2026

Secondary sources

UNN: EU extends sanctions against Russia for 12 months for the first time — June 19, 2026

The Claw Street Journal: Iran ceasefire, China-NATO realignment — June 21, 2026

Euronews: Fuel crisis and war costs — June 20, 2026