The United States government has enacted a brief waiver on sanctions, permitting India to acquire Russian oil that is currently at sea. This decision comes as tensions in the Middle East escalate.
Treasury Secretary Scott Bessent described the 30-day allowance as a “deliberate short-term measure” aimed at maintaining the flow of oil in the global market.
Impact of Regional Conflict on Energy Routes
Millions of barrels of oil and gas are held up near the Strait of Hormuz, a crucial maritime chokepoint. This strait is vital for India’s energy imports, handling almost half of its crude oil and gas transit. Tehran has issued threats to vessels attempting passage, following the commencement of military actions by the US and Israel against Iran.
Following Russia’s invasion of Ukraine, the US imposed sanctions on Russian oil, prompting a search for alternative suppliers among buyers. Washington had previously applied considerable pressure on India, a significant purchaser of Russian energy, to cease these imports as a means to curb funding for the invasion.
Treasury’s Assessment of the Waiver
Secretary Bessent stated that the waiver would not confer substantial financial advantages to Russia. The authorization is specifically for transactions involving oil that is already stranded at sea.
“This stop-gap measure will alleviate the pressure caused by Iran’s attempt to take global energy hostage,” Bessent commented on the platform X.
India’s Imminent Energy Concerns
The indefinite disruption of supplies has fueled concerns about an impending energy crisis in India. Reports indicate the country possesses crude oil and gas reserves sufficient for approximately 25 days.
In related news, US President Donald Trump has cautioned that the conflict with Iran, which began last Saturday, could extend for four to five weeks or even longer.
Disruptions to LNG and Gas Supplies
On Wednesday, Petronet LNG, India’s primary gas importer, issued a force majeure notice to its supplier, QatarEnergy, and its domestic customers. This action was taken after its LNG tankers were unable to reach the loading terminal at Ras Laffan in Doha.
The Gas Authority of India Ltd (Gail) and Indian Oil Corp (IOC) have already begun reducing gas deliveries to industrial clients, as reported by Reuters news agency on Tuesday.
India’s Oil Import Landscape
Regarding oil, India imports 90% of its crude supply. Approximately half of this volume, equating to 2.5 to 2.7 million barrels daily, traverses the Strait of Hormuz, originating primarily from Iraq, Saudi Arabia, the United Arab Emirates, and Kuwait.
Experts suggest that a supply shortage caused by the closure of the strait could lead to increased inflation and widen India’s fiscal deficit.
Potential Impact of the Waiver on Russian Crude
With the waiver now in effect, approximately 145 million barrels of Russian crude currently at sea could potentially be rerouted to Indian ports, provided commercial agreements are finalized. This observation was shared by Sumit Ritolia, lead research analyst at Kpler, in a statement to the BBC.
“However, the waiver does not fundamentally alter India’s structural vulnerability to Middle Eastern supply flows,” Ritolia added.
Shift in US Policy Regarding Indian Oil Imports
Russian oil constitutes an estimated 20% of India’s total oil imports. This current waiver signifies a notable adjustment in the US stance toward India’s acquisition of Russian oil.
Not long ago, Donald Trump imposed a 50% tariff on India, which included a 25% levy on oil imported from Russia. Trump contended that India’s purchases of Russian oil were contributing to the funding of Russia’s war in Ukraine.
India’s Defense of its Energy Procurement
India has consistently defended its procurement of Russian crude, asserting the necessity of meeting the energy demands of its large population. The nation also maintains its right to conduct business with its trading partners.
However, since late 2025, India has reportedly begun decreasing its imports of Russian crude. Concurrently, it has increased its crude oil purchases from the United States.
Past Statements on Shifting Trade Dynamics
In a post on his Truth Social platform, Trump stated that Indian Prime Minister Narendra Modi had “agreed to stop buying Russian oil, and to buy much more oil from the United States and, potentially, Venezuela.”
India has never officially confirmed any reduction in its imports of Russian crude and maintains that it will not permit its trading relationships to be dictated by other countries.