The U.S. Treasury Department confirmed that it will not extend the short-term exemption and warned financial institutions against assisting the Iranian government in transferring funds. It reportedly sent letters to countries and regions, including the UAE, on Tuesday, urging them to cooperate in identifying and halting banking activities related to the Iranian government. Last month, the department granted a 30-day exemption allowing some Iranian crude oil, totaling 140 million barrels, located offshore to flow into the market. The exemption is set to expire this Sunday.
Amid the ongoing tensions in the Middle East, there has been a shift in the U.S. policy of easing sanctions on Iranian oil.
On Tuesday, the 14th, Eastern Time, media reports citing informed U.S. government officials indicated that the Trump administration had decided to allow the previously issued temporary sanctions waivers for Iran's maritime crude oil transportation to expire as scheduled. The end of this exceptional measure, introduced during wartime to alleviate energy supply pressures, signifies that restrictions on Iran’s oil exports may be tightened again.
Subsequently, the U.S. Department of the Treasury confirmed the above media report in a statement released on social media. It explicitly stated: “The authorization to sell Iranian oil that has been stranded at sea within a short period will expire in a few days and will not be extended.”
The U.S. Department of the Treasury also warned banks not to assist the Iranian government in transferring funds. Its statement read: “All financial institutions should take note: this department is fully utilizing all available tools and authorities and is prepared to impose secondary sanctions on foreign financial institutions that continue to support Iran-related activities.”
Near the close of the U.S. stock market, American media learned that the U.S. Department of the Treasury sent a warning letter to countries such as the UAE regarding Iranian banking operations on Tuesday. The letter noted that transactions conducted by the Iranian government through proxy companies in 2024 amounted to $9 billion, with these transactions primarily processed through banks located in countries such as the UAE.
The aforementioned letter from the Treasury Department pointed out that certain banks within the judicial jurisdictions of the recipient countries allowed operations related to the Iranian government. It urged these countries and their banks to cooperate in identifying Iran-related financial activities and, considering the significant illicit financial risks posed by such activities, to halt them.
Analysis suggests that from a policy perspective, the U.S. approach of initially easing then tightening oil sanctions is essentially a typical crisis management tool. The short-term goal was to ease supply shocks and stabilize oil prices, while the return to mid-term sanctions indicates a restoration of the framework for exerting 'maximum pressure' on Iran.
As the exemptions expire, the global energy market will once again face two core variables: whether Iran’s crude oil exports will contract sharply again and whether the situation in the Strait of Hormuz and geopolitical tensions will genuinely ease. Amid supply disruptions and diplomatic maneuvering, oil price volatility is expected to remain high.
Temporary exemptions nearing expiration: approximately 140 million barrels of crude oil were previously allowed to proceed.
According to the report released on Tuesday, the US Treasury Department granted a 30-day exemption on March 20 for sanctioned Iranian oil transported by sea, allowing some Iranian crude oil already at sea to continue flowing to the market, with a total volume of about 140 million barrels.
This exemption will expire on April 19, this Sunday. According to the report, the US government does not intend to extend the exemption period. This means that related transactions involving Iranian crude oil currently in transit will once again face sanctions.
The media noted that this move marks the conclusion of the US’s short-term balancing act between energy and geopolitics. The core purpose of previously easing restrictions on Iranian crude oil supplies was to “inject liquidity” into the market amid heightened tensions in the Strait of Hormuz and global supply disruptions.
Background: Exceptional policies under war impact.
The exemption issued by the US government came as the 2026 escalation of conflicts in the Middle East led to the temporary obstruction of the Strait of Hormuz.
The United States imposed a maritime blockade on Iran, affecting approximately 2 million barrels per day of exports. Global supply plummeted temporarily, with the International Energy Agency (IEA) stating that the scale of losses reached 10 million barrels per day.
Against this backdrop, the United States briefly allowed certain oil transactions involving Iran and Russia in an effort to curb soaring oil prices and stabilize market expectations.
Indian media reported that India, after a seven-year hiatus, regained access to Iranian crude oil supplies, directly benefiting from the U.S. exemption policy.
Political Pressure and Sanctions Tools: Washington's Stance Turns Aggressive
On Tuesday this week, media reports indicated that the temporary easing of Iran oil sanctions faced bipartisan criticism within the United States, with critics arguing that relaxing energy restrictions on Iran and Russia during conflicts “sends the wrong signal.”
As the exemption period expires, the U.S. government emphasized its continued possession of “broad sanctions tools,” including:
Imposing secondary sanctions on third parties purchasing Iranian oil
Leveraging relevant mechanisms at the United Nations to strengthen restrictions
And warning any entities continuing oil transactions with Iran that they may face new penalties.
From a market perspective, investors are caught in a tug-of-war between two expectations. On one hand, the reinstatement of sanctions implies that Iranian crude oil supplies may be constrained again; on the other hand, markets still hope for de-escalation prospects brought by renewed U.S.-Iran negotiations.
Media reports indicate that against the backdrop of warming expectations for U.S.-Iran negotiations, international oil prices have recently declined, with Brent crude retreating to around $95 per barrel.
Editor/Liam