US Gives India 30-Day Waiver to Buy Russian Oil

The development comes after Washington had previously imposed 25% punitive tariffs on Indian imports as a penalty for buying Russian crude following Moscow’s invasion of Ukraine. Those tariffs were removed last month after India agreed to scale down purchases from Russia and increase imports of American energy. However, the escalating Iran–Israel War has created new supply concerns, prompting the US administration to allow limited transactions involving Russian oil.

Waiver Limited to Oil Already in Transit

According to the US Treasury Department, the exemption applies strictly to Russian oil shipments that had already been loaded onto tankers before new sanctions took effect on March 5, 2026. These cargoes had been left stranded at sea as sanctions tightened and buyers withdrew.

Under the authorisation, transactions related to the sale, delivery, and offloading of these cargoes at Indian ports will be allowed until April 4, 2026, provided the purchasing entity is registered in India. Officials clarified that the waiver is a short-term measure designed to prevent disruptions in global supply and will not generate significant financial gains for Russia because it only covers oil already in transit.

Middle East Conflict Triggers Supply Disruptions

The waiver comes amid major disruptions in global energy markets caused by the closure of the Strait of Hormuz, one of the most critical oil transit routes in the world. The narrow waterway handles around 20% of global crude oil shipments, and maritime traffic has largely stalled following warnings from Iran and surging insurance costs for vessels operating in the region.

Reports indicate that no fully loaded crude tankers have crossed the Strait of Hormuz since last weekend, significantly tightening supply conditions. At the same time, several major oil installations across the Gulf region have been affected by the conflict, including Saudi Aramco’s Ras Tanura refinery and Iraq’s Rumaila oil field, adding further stress to the global energy supply chain.

Oil Prices Surge on Geopolitical Tensions

The escalating conflict has triggered a significant surge in oil prices.

On Thursday, West Texas Intermediate crude oil jumped 7.06% to $80.52 per barrel, marking the biggest single-day gain since May 2020. Meanwhile, Brent Crude Oil, the global benchmark, rose 4.16% to $84.82 per barrel.

Later trading on Friday saw some cooling in prices, with Brent around $82.98 per barrel and WTI near $78.45 per barrel. Despite the brief pullback, US crude prices have climbed about 20% during the week as geopolitical tensions escalated.

India’s Strategic Need for Alternative Supplies

India is particularly exposed to supply disruptions because it is the world’s third-largest importer of crude oil, as well as the fourth-largest refining hub and fifth-largest exporter of refined petroleum products. A significant portion of India’s oil imports typically originates from the Middle East, much of which is transported through the Strait of Hormuz.

Energy research firm Rystad Energy estimates that India currently holds around 100 million barrels of accessible crude, enough to meet approximately 45 days of domestic demand. While this inventory provides short-term relief, analysts warn that prolonged disruption in Gulf supplies could create challenges for Indian refineries in the coming weeks.

Indian Refiners Return to Russian Market

Market data indicates that Indian refiners have already begun seeking Russian cargoes to address potential shortages. Industry sources suggest that India may have secured between 6 million and 8 million barrels of Russian crude over the past two to three days, while other reports indicate total purchases could be as high as 20 million barrels through trader deals.

Several major Indian refiners are reportedly negotiating for prompt deliveries, including Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation, and Mangalore Refinery and Petrochemicals Limited. Private sector major Reliance Industries is also believed to be exploring opportunities to secure Russian shipments.

Russian Crude Pricing Dynamics Change

The global supply crunch has dramatically altered the pricing structure for Russian oil. Traders are currently offering Russian Urals crude at a premium of $4 to $5 per barrel above Brent for cargoes scheduled to arrive in March and early April.

This marks a significant reversal compared with February, when the same grade was trading about $13 per barrel below Brent, highlighting how tight supply conditions have reshaped the market. Industry participants now say that availability of crude has become a bigger concern than pricing, as buyers scramble to secure shipments amid uncertainty in the Middle East.

US Seeks to Stabilise Markets While Expanding Energy Exports

The waiver is part of a broader effort by the United States to contain the surge in oil prices and prevent a deeper global supply shock. Washington has also offered political risk insurance for tankers navigating Gulf waters to encourage shipping activity despite rising security concerns.

US President Donald Trump indicated that further measures could be taken if needed, stating that the administration is working to maintain stability in the energy market while expanding oil production.

At the same time, US officials have reiterated that India is expected to increase purchases of American crude in the future, emphasising the strategic energy partnership between the two countries.

For now, the 30-day waiver provides temporary breathing room, allowing stranded Russian crude cargoes to reach Indian ports and helping ease pressure on global oil markets during an exceptionally turbulent period for the energy sector.