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European Oil Markets
4JUN

GL 134A lapses toward quiet extension

3 min read
10:20UTC

Treasury's Russian crude waiver expired on 11 April with wire reporting from Reuters, Semafor and Bloomberg pointing to renewal worth roughly $150 million a day to Moscow at current Urals prices.

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Key takeaway

The Russian oil waiver is the same instrument doing the opposite job it was designed for.

General License 134A (GL 134A), the OFAC (Office of Foreign Assets Control) waiver that authorised transactions for Russian crude loaded before 12 March, expired on 11 April. Reuters, Semafor and Bloomberg report, citing people familiar with the discussions, that an extension is coming 1. A Treasury spokesperson offered only that the department "does not preview actions related to our sanctions."

Daniel Fried at the Atlantic Council called on Treasury Secretary Scott Bessent on 8 April to let the waiver lapse and fall back on the price cap. Asian governments led by India and the Philippines are pushing in the other direction. A week ago this was framed as a binary choice at $121 Urals . Bloomberg estimates the waiver is worth roughly $150 million a day in additional Russian budget revenue at $114 to $116 Urals.

One week of that uplift covers a fortnight of Kinzhal strikes. A full year covers a sum the EU has spent months trying to route to Kyiv against Hungarian opposition. The original GL 134 was defensible in March at $73 a barrel as market stabilisation after the Strait of Hormuz closed. At 64% above that price, and with the Iran ceasefire of 8 April partially reopening Hormuz, the same instrument now hands Moscow a surplus the sanctions architecture was designed to prevent. The Russia-Iran corridor that Israel struck at Bandar Anzali last month still runs.

Deep Analysis

In plain English

When the Iran conflict disrupted oil markets in March, the US Treasury issued a temporary waiver allowing banks and traders to continue processing payments for Russian crude already at sea. The idea was to prevent a sudden oil price spike. The waiver was set to expire on 11 April. The problem: when the waiver was issued, Russian oil was selling at $73 per barrel. By expiry it was trading at $114-116. That means every extra day of extension hands Russia roughly $150 million in war-funding revenue that sanctions were supposed to block.

Deep Analysis
Root Causes

GL 134A was issued on 12 March 2026 as a market-stabilisation measure when the Iran war disrupted Gulf crude flows. The structural problem is that the licence's dollar value is oil-price-sensitive: a barrel-price doubling since issuance means the waiver now hands Moscow a windfall the original policy never contemplated.

The secondary cause is bureaucratic path dependency. Once a sanctions waiver is issued to enable active market transactions, financial institutions and energy traders build positions around it. Lapse without a wind-down window triggers counterparty defaults that US regulators are reluctant to own.

What could happen next?
  • Consequence

    Each week of extension at current Urals prices transfers approximately $1.05 billion to Russia, partially offsetting the impact of the EU's phased gas import ban beginning 25 April.

  • Risk

    If the waiver is extended without a firm sunset date, it establishes precedent that sanctions can be indefinitely deferred when market conditions create lobby pressure, weakening the credibility of the entire OFAC architecture.

Sources:Reuters (via Kyiv Independent)·Reuters (via Kyiv Independent)
Mentions:CNN →Semafor →Bloomberg →Iran →Philippines →Moscow →Kyiv →The Atlantic →US Treasury →OFAC →Atlantic Council →Daniel Fried →Urals →Prima →Washington →Russia →Bandar Anzali →Israel →Strait of Hormuz →Venezuela →India →General License U →Scott Bessent →
First Reported In

Update #12 · Three narrowings of US support for Kyiv

Reuters (via Kyiv Independent)· 11 Apr 2026
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Causes and effects
Caused by
US Oil Sanctions Waiver Expires 11 April Amid Confusion
GL 134A event is the direct resolution of ID:2027's binary-choice framing: extension at $121/bbl or lapse on the 11 April expiry date.
Occurred 2 Apr 2026
Read story →
This Event
GL 134A lapses toward quiet extension
An expiring waiver at $73 was market stabilisation; the same instrument at $115 is a budget transfer.
Led to
Treasury kills $150M-a-day Russian oil waiver
GL 134A expired on 11 April with wire consensus pointing to extension; Bessent's 16 April non-renewal defied that expectation.
Occurred 16 Apr 2026
Read story →
Russia GL-134B extended as Iran GL-U lapses
Russia's GL-134A expired on 11 April (ID:2226) and was extended to GL-134B on 19 April, widening the Russia-yes Iran-no asymmetry documented in this event.
Occurred 19 Apr 2026
Read story →
OFAC quietly extends Russia crude waiver
GL 134A's 11 April expiry created the legal gap that GL 134B bridged, extending the at-sea crude waiver by one month
Occurred 17 Apr 2026
Read story →
Different Perspectives
Kuwait
Kuwait
Kuwait absorbed the Iranian strike that knocked generating units offline at a combined power-and-desalination plant on 17 July, the event that finally moved freight and insurance in lockstep with Brent. The strike hit essential civilian infrastructure, not a trading desk's benchmark.
Asian buyers (Singapore)
Asian buyers (Singapore)
Singapore's middle distillates rose 12% month-to-date to 8.91m barrels and fuel oil passed 19m barrels on a 105% net-import surge, buyers retaining barrels as the East-West arbitrage window narrows. Cargoes are being stockpiled ahead of further Hormuz-driven freight repricing rather than released west.
Austria (Coreper holdout)
Austria (Coreper holdout)
Vienna is blocking the same package over roughly EUR 2bn of frozen Russian assets earmarked for Raiffeisen, a domestic banking dispute with no connection to the oil cap racing toward its 23 July expiry. The linkage forces the whole package to wait on a bilateral compensation fight.
Greece (Coreper holdout)
Greece (Coreper holdout)
Athens is holding the 21st sanctions package at the 22 July Coreper vote over Russian LNG re-export rights, a condition unrelated to the oil price cap itself, leaving the $44.10 freeze one day from expiry without a deal. Greece's own tanker registry gives it a direct stake in how any shadow-fleet measures are drafted.
Marine underwriters (Gulf war-risk)
Marine underwriters (Gulf war-risk)
Hull war-risk cover for Hormuz transits widened to a 3-10% band on 17 July with 5% the emerging norm, up from a 3-4% baseline set in late June, the first repricing in six weeks to track a flat-price move rather than lag it. Cover resets on actuarial evidence of loss, not on diplomatic or price signals.
Money managers (CFTC-tracked)
Money managers (CFTC-tracked)
The CFTC's week-to-14-July snapshot, released 17 July, showed WTI managed-money net long collapsing 69% to 19,783 contracts and a standalone 60,141-contract net short on Brent Last Day (NYMEX). Both readings predate the Kuwait strike and the 20 July escalation, so any covering since is not yet visible in public data.