The US Treasury Department has extended a key waiver to its Russia sanctions allowing energy-related payments to continue until Dec. 5.
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Register NowThe waiver was previously set to expire June 24.
The measure permits what is commonly known as "U-turn transactions," or when payments related to energy are processed through non-sanctioned, third-country financial institutions, allowing transactions that support the flow of energy to the market, Treasury said in March when it first issued guidance on the sanctions exemption.
The waiver defines energy broadly, listing the extraction, production, and refining of any petroleum products as well as other commodities capable of producing energy, such as coal, wood, agricultural products for biofuels, uranium, and electricity of all kinds.
The US banned Russian oil imports in March, and the EU is phasing out its reliance on the flows through the end of the year.
S&P Global Commodity Insights expects the EU phaseout to trigger Russian production shut-ins of 2 million b/d by December, up from 850,000 b/d in May.
While Russian crude exports continue to grow, recent shipping data shows global demand has slowed considerably.