U.S. offers India a 30-day waiver for Russian oil amid supply worries
This photo shows a page on the Marinetraffic website showing commercial ship traffic on the edge of the Strait of Hormuz near the Iranian coast on March 4, 2026.
Julien DeRosa | Afp | Getty Images
After the US imposed a 25 percent “penalty” tax on India on Thursday over its purchases of crude oil from Russia (rescinded last month). Issue 30-day exemption for New Delhi to purchase crude oil from Moscow as the Iran war negatively affects global supply.
West Texas Intermediate crude rose 8.51%, or $6.35, to close at $81.01 a barrel on Thursday, its biggest single-day gain since May 2020. Global benchmark Brent settled at $85.41 per barrel, up 4.93% or $4.01.
Since India is the world’s fourth-largest refiner and fifth-largest refiner, the exemption from purchasing Russian oil will help ease supply concerns globally. the biggest exporter of petroleum products.
New Delhi, which is also the world’s third-largest oil importer, has replaced Russian oil purchases with supplies from the Middle East, but has started sourcing energy from Moscow due to the conflict affecting energy supplies from Gulf countries, experts said.
“I heard that Indian refiners have been actively seeking crude oil supplies from Russia since last weekend,” said Muyu Xu, senior crude oil research analyst at Kpler, which tracks energy data, adding that based on “rumors in the market”, New Delhi has probably purchased up to 6-8 million barrels of Russian oil in the last 2-3 days.
This “short-term measure” will not bring significant financial benefit to Russia because it currently only allows oil transactions stranded US Treasury Secretary Scott Bessant said the following about the sea in a post on X:
The U.S. government is taking steps to limit rising oil prices, including offering political risk insurance to tankers passing through the Gulf. Brent and WTI crude oil It fell over 1 percent on Friday and last traded at $84.42 and $79.92 per barrel, respectively.
“IT [the waiver] Vandana Hari, CEO of energy research firm Vanda Insights, said there is a relief valve given the loss of roughly 20 million barrels of crude oil per day from Gulf producers, adding that the 30-day exemption is “not nearly enough” and Washington continues to put a “Band-Aid on a gunshot wound.”
US crude oil prices rose nearly 20% this week, driven by escalating conflicts in the Middle East.
“Further steps to reduce pressure on oil are imminent, and in the long term, the steps we take will significantly increase pressure on oil.” stability “The situation of the region and oil prices,” US President Donald Trump said on Thursday.
Hari expects Brent crude to continue “climbing above $80” as he feels the chances of the Hormuz blockade being lifted quickly are “extremely slim”. Traffic in the Strait of Hormuz, the waterway that provides 20 percent of the global oil flow, has come to a halt due to Iran’s warnings and increased insurance costs for shippers.
““Our data shows that no loaded crude tankers, including ships destined for India, have passed through the Strait of Hormuz since last weekend,” he said.
Impact on India
India currently has “access to around 100 million barrels,” which would be enough to meet 45 days of crude oil demand, Prateek Pandey, head of APAC oil and gas research at energy intelligence firm Rystad Energy, told CNBC.Inside India” on Thursday.
Pandey says Indian refineries will not be affected for next three to four weeks, but “there will be concerns” if the deterioration in the Middle East continues beyond that.
He said that sourcing from alternative destinations such as Venezuela creates difficulties as these cargoes take almost a month to reach India.
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In August last year, India faced a 50% US tariff, 25% of which was a penalty for purchasing Russian oil. Last month, the penalty was lifted on the condition that India cut imports from Moscow and buy more American energy supplies. Washington has warned that the penalty could be reimposed if India continues to buy Russian oil.
“I have yet to see an increase in US crude oil inflows to India,” Xu said, adding that any increase in American oil purchases in New Delhi after the trade deal would be reflected in April or May data.
