WASHINGTON — The Treasury Department quietly extended waivers Friday allowing six countries to continue buying Russian oil, even as the US presses allies to tighten sanctions on Moscow's energy exports.

The move keeps alive a sanctions loophole that has funneled billions to Russia's war chest. But it also prevents a supply shock that could send crude prices above $100 per barrel.

Brent crude closed Friday at $90.38 per barrel, up 2.1% on the week. WTI settled at $83.85. Both benchmarks remain well below the $120 peaks hit during the initial weeks of Russia's invasion.

The calculation Treasury made:

India, China, Turkey, and three other countries can keep purchasing Russian crude without triggering US secondary sanctions. The waivers, originally set to expire May 1, now run through August 15.

"Abrupt supply disruptions would harm American consumers more than Russian revenues," said Deputy Secretary Wally Adeyemo in a statement to Reuters.

But energy analysts see the waiver extension as admission that the sanctions regime has structural flaws. "You cannot simultaneously starve Russia of revenue and keep global oil prices stable," said Sarah Chen, director of energy policy at the Peterson Institute. "Treasury chose price stability."

The decision reflects broader tensions within the Biden administration's sanctions strategy. Hawks at State and NSC wanted the waivers to expire. Treasury and the National Economic Council argued for extension.

India's oil laundering operation:

New Delhi has emerged as Moscow's largest oil customer, importing 1.7 million barrels per day of Russian crude in March — a 340% increase from pre-war levels. Indian refiners process the oil and export refined products to Europe and the US.

"India is not just buying Russian oil," said Arjun Murti, former Goldman Sachs energy strategist now at Veriten. "They are laundering it."

The waiver system was designed as a temporary bridge while alternative supplies came online. Two years later, Russian oil still accounts for roughly 11% of global production. Saudi Arabia and the UAE have refused to significantly boost output to compensate for potential Russian losses.

Energy Secretary Jennifer Granholm defended the extension during a Friday briefing. "We are not choosing between sanctions effectiveness and energy security," she said. "We are managing both priorities."

Critics disagree. Senator Marco Rubio called the waivers "sanctions theater" in a statement Friday. "We are funding Putin's war machine while pretending to isolate Russia economically."

Three things changed the math:

First, China's economy showed unexpected resilience in Q1 2026, boosting global oil demand by 1.2 million barrels per day above forecasts. Second, Nigerian production fell 400,000 barrels per day due to pipeline attacks. Third, Iran's crude exports remain constrained by the ongoing conflict with Israel.

"Remove Russian barrels now and you get $110 oil by summer," said one senior Treasury official, speaking on condition of anonymity. "That kills the economic recovery."

The extension also buys time for the US Strategic Petroleum Reserve to rebuild. The reserve currently holds 351 million barrels — its lowest level since 1983. The administration has been refilling at an average rate of 3 million barrels per month.

Republican lawmakers seized on the decision as evidence of failed energy policy. "Biden drained our strategic reserves and now cannot afford to enforce his own sanctions," said House Energy Committee Chair Cathy McMorris Rodgers.

The enforcement charade:

Even with waivers, countries are supposed to limit purchases to pre-war levels and pay below a $60 per barrel price cap. Compliance has been spotty.

India imported 51.2 million barrels of Russian crude in March — nearly double its February 2022 average. China bought 43.7 million barrels, also well above historical norms.

Treasury has imposed sanctions on 47 tankers and 23 trading companies for price cap violations since January. But the "shadow fleet" of aging vessels carrying Russian oil has grown to over 600 ships.

"The sanctions are Swiss cheese," said Rachel Ziemba, adjunct fellow at the Center for a New American Security. "Full of holes and everyone knows it."

The waiver extension coincides with renewed diplomatic efforts to isolate Russia. Secretary of State Antony Blinken will travel to New Delhi next week, partly to discuss energy cooperation alternatives.

But India shows little interest in reducing Russian imports. External Affairs Minister Subrahmanyam Jaishankar told parliament Thursday that India would continue buying oil "from wherever we can get the best deal."

August deadline? Don't count on it:

Treasury officials say the August 15 deadline is firm. But they said the same about the May 1 deadline in February.

The next review will consider several factors: global spare capacity, Strategic Petroleum Reserve levels, and progress on alternative supply agreements with Gulf producers.

Oil traders are already positioning for another extension. Brent futures for September delivery closed Friday at $91.20 — a $0.82 premium to spot prices.

"The market does not believe August is real," said Andy Lipow, president of Lipow Oil Associates. "Neither do I."

The Treasury Department will publish detailed waiver terms Monday. Energy markets will be watching for any changes to volume limits or price cap enforcement mechanisms.