The United States has granted India a 30-day waiver to purchase Russian oil, following the revocation of 25% penalty tariffs imposed last month. This move comes amid disruptions in global energy supplies caused by the ongoing Iran war, which has significantly impacted oil flows from Gulf producers and led India to seek alternative sources of crude, including Russia [1]. On Thursday, West Texas Intermediate (WTI) oil surged 8.51% ($6.35) to close at $81.01 per barrel, marking its largest single-day gain since May 2020. Brent crude rose 4.93% ($4.01) to settle at $85.41 per barrel. However, both benchmarks fell over 1% on Friday, with Brent last trading at $84.42 and WTI at $79.92 per barrel [1].
India, the world's third-largest oil importer and fourth-largest refiner, had been replacing Russian oil with Middle Eastern supply but is now turning back to Moscow due to the conflict's impact on Gulf energy supplies. Muyu Xu, senior research analyst at Kpler, noted that Indian refiners have been actively seeking prompt Russian crude supplies since last weekend, with market chatter suggesting India may have bought up to 6-8 million barrels of Russian oil in the past 2–3 days [1].
U.S. Secretary of the Treasury Scott Bessant stated that the waiver is a "short-term measure" and will not provide significant financial benefit to Russia, as it only allows transactions of oil already stranded at sea. The U.S. government is also offering political risk insurance for tankers transiting the Gulf to help curb rising oil prices [1].
Vandana Hari, CEO of Vanda Insights, described the waiver as a "relief valve" in light of the loss of nearly 20 million barrels per day of crude from Gulf producers, but emphasized that the 30-day waiver is "not nearly enough" and likened Washington's actions to "band aids on a gunshot wound." U.S. crude prices have climbed about 20% this week due to the escalating conflict in the Middle East. President Donald Trump indicated that further action to reduce pressure on oil is imminent and that long-term measures will increase regional stability and stabilize oil prices [1].
Hari expects Brent crude to continue "creeping higher than the $80s," citing dim prospects for a quick lifting of the Hormuz blockade. The Strait of Hormuz, which accounts for 20% of global oil flows, remains at a standstill following Iranian warnings and surging insurance costs for shippers. Xu confirmed that no laden crude tankers have transited the Strait of Hormuz since last weekend, including vessels potentially bound for India. According to Prateek Pandey, head of APAC oil, India currently has access to about 100 million barrels, enough to cover up to 45 days of crude demand [1].
CONCLUSION
The U.S. waiver for India to buy Russian oil is a significant short-term measure to address supply disruptions caused by the Iran war and Gulf producer outages. While it has temporarily eased market concerns and volatility, analysts warn that the relief is limited and oil prices are likely to remain elevated due to ongoing geopolitical risks and the unresolved Hormuz blockade. The market impact is high, with crude prices experiencing sharp swings and continued uncertainty over future supply stability.