Oil Prices Fall After US Grants 30-Day Waiver for Indian Refiners to Buy Russian Crude
Crude oil prices declined in early trading on Friday after the United States announced a temporary 30-day waiver allowing Indian refiners to purchase Russian oil shipments currently stranded at sea. The move is expected to provide short-term relief to global energy markets amid supply disruptions and rising geopolitical tensions in West Asia.
Oil Prices Slip in Early Trade
Global crude benchmarks traded lower as the announcement eased concerns over supply shortages.
At 8:18 AM, the April contract of Brent crude on the Intercontinental Exchange was trading at $84.21 per barrel, down 1.52% from its previous close. Meanwhile, West Texas Intermediate (WTI) crude fell 2.10% to $79.31 per barrel.
The decline comes after oil prices surged more than 15% in the past week, largely due to escalating geopolitical tensions and disruptions near key shipping routes.
US Announces Temporary Waiver for Indian Refiners
US Treasury Secretary Scott Bessent said the waiver would allow Indian refiners to purchase Russian crude already in transit. The short-term exemption is aimed at stabilizing global oil supply during the ongoing conflict in West Asia.
According to Bessent, the waiver is designed to ensure that oil continues flowing into global markets without providing significant financial benefits to Russia.
“To enable oil to keep flowing into the global market, the Treasury Department is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil already stranded at sea,” Bessent said.
The Office of Foreign Assets Control (OFAC) confirmed that the waiver applies to Russian-origin crude oil loaded on vessels on or before March 5, 2026.
Indian Oil Imports May Shift Toward Russia
India may increase imports of Russian crude as fresh oil supplies from West Asia remain uncertain. The ongoing tensions around the Strait of Hormuz, one of the world's most critical oil shipping routes, have raised concerns about supply disruptions.
Although India has continued buying Russian oil despite sanctions, imports have declined in recent months.
According to data from ship-tracking firm Kpler:
- Russia supplied 1.04 million barrels per day (bpd) to India in February
- Saudi Arabia supplied around 1 million bpd
- Iraq supplied about 980,000 bpd
Russian supplies had previously reached 1.8 million bpd in November 2025 and nearly 2 million bpd in July 2024.
US Warns of Possible Tariff Reinstatement
The temporary waiver also follows a recent executive order by US President Donald Trump, which revoked an additional 25% tariff on India.
However, the order warned that tariffs could be reimposed if India significantly increases purchases of Russian oil again.
India has maintained that its energy import strategy is guided by national interest and energy security.
India’s Foreign Secretary Vikram Misri emphasized that the country will continue diversifying its energy sources to ensure stable supply.
“Our approach is to maintain multiple sources of supply and diversify them to ensure stability,” Misri said.
Rising Oil Prices Pose Risks for India
The recent surge in oil prices carries significant implications for India, which imports nearly 90% of its crude oil requirements.
India consumes approximately 5.5 million barrels of crude oil daily, making it the third-largest oil importer in the world.
Higher oil prices could:
- Increase inflation
- Widen the current account deficit
- Put pressure on the Indian rupee
- Increase fiscal deficit challenges
- Strait of Hormuz Tensions Threaten Global Supply
Energy markets remain on edge as tensions rise around the Strait of Hormuz, a narrow passage through which a large portion of global oil and liquefied natural gas (LNG) supplies transit.
In FY25, around:
- 50% of India’s crude oil imports
- 54% of its LNG imports
- passed through the Strait.
According to S&P Global Energy, the ongoing conflict involving the US, Israel, and Iran could potentially lead to one of the largest oil supply disruptions in history if tanker traffic remains restricted.
Recent data shows that only five oil tankers passed through the Strait on March 1, compared to the typical 60 tankers per day.
Energy experts warn that if tanker traffic remains low for an extended period, global oil markets could face severe supply shortages and further price volatility.
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