- US grants India 30-day waiver for Russian oil purchases amid Iran war.
- Targets stranded cargoes; no significant benefit to Russia.
- Strait of Hormuz stalled; India stocks cover 45 days, prices surge.
Due to the tensions in the Middle East, especially concerning Iran and resulting disruptions to energy supply chains across the world, the U.S. has provided a temporary (30-day) waiver for Indian refiners to buy Russian crude oil. This will allow for future purchases of Russian crude oil and will be applicable to oil shipments that are loaded on ships and arrived in India before April 4, 2026. The intent of the overall waiver is twofold, firstly to prevent immediate supply shortages and secondly to place some limits on financial support going to Russian oil producers.
U.S. Treasury Secretary Scott Bessent described the measure as a short-term "relief valve" to keep oil flowing into global markets amid Iran's blockade of the Strait of Hormuz, through which about 20% of world oil transits. No laden crude tankers have passed through the strait since last weekend, halting nearly 20 million barrels per day from Gulf producers. Bessent emphasized the waiver targets stranded cargoes at sea and will not significantly aid Moscow financially.
The decision follows last month's revocation of 25% U.S. penalty tariffs on India for buying Russian oil (imposed earlier as punishment), conditional on reduced Russian imports and increased U.S. energy purchases. President Donald Trump indicated further actions to stabilize oil prices and the region are imminent.
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Analysts have pointed out that India's refiners have actively purchased prompt cargoes from Russia since last weekend, with estimates of up to 6-8 million barrels having been acquired in the last couple of days. As the third-largest global oil importer and fourth-largest oil refiner, India has about 100 million barrels of crude oil in storage (or roughly enough for 45 days); however, a prolonged disruption might pose a concern after three to four weeks.
As a result, oil prices spiked sharply, WTI surged 8.51% to $81.01/barrel on Thursday (biggest daily gain since May 2020), while Brent rose 4.93% to $85.41. Prices eased slightly on Friday but remain elevated amid supply fears.
Experts like Vandana Hari (Vanda Insights) called the waiver insufficient for the scale of disruption, predicting Brent to stay above the $80s with dim prospects for quick Hormuz reopening. Prateek Pandey (Rystad Energy) said alternate sourcing (e.g., Venezuela) takes nearly a month to reach India.