US grants India 30-day waiver to buy Russian crude as Strait of Hormuz disruptions rattle global oil supply

In a move aimed at stabilising global energy markets amid mounting geopolitical tensions in West Asia, the United States has granted India a temporary 30-day waiver allowing refiners to purchase Russian crude oil. The decision is intended to prevent “supply disruptions” after the ongoing Iran conflict began affecting shipping routes through the Strait of Hormuz—one of the world’s most critical oil transit corridors.

The exemption, issued by the US Treasury, allows Indian refiners to procure Russian crude cargoes that are already in transit or stranded at sea. The move comes as disruptions to shipments passing through the Strait of Hormuz raise concerns over supply stability for major import-dependent economies such as India.

India sources nearly 40% of its crude imports from the Middle East, much of which travels through the strategically crucial Strait of Hormuz. Any prolonged disruption in the corridor can quickly affect supply chains and global price dynamics.

Announcing the waiver, US Treasury Secretary Scott Bessent said the measure is intended to keep oil flowing into global markets while limiting financial gains for Russia.

“President Trump's energy agenda has resulted in oil and gas production reaching the highest levels ever recorded. 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,” Bessent said.

“This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorizes transactions involving oil already stranded at sea. India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of U.S. oil. This stop-gap measure will alleviate pressure caused by Iran's attempt to take global energy hostage,” he added.

The escalation in the Gulf has pushed refiners across Asia to seek alternative supplies, bringing Russian crude back into focus for Indian buyers. India, the world’s third-largest crude importer, depends on overseas shipments for nearly 90% of its oil consumption.

Refiners secure supplies

State-run refiners including Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), and Mangalore Refinery and Petrochemicals Ltd (MRPL) have begun negotiating prompt Russian cargoes for March and April deliveries.

Some refiners have already secured millions of barrels as a precautionary measure against potential supply disruptions triggered by the Gulf crisis.

India’s dependence on Middle Eastern supplies leaves it particularly exposed to regional instability. A news agency reported that the country’s crude reserves cover roughly 25 days of demand, while about 40% of imports pass through the Strait of Hormuz.

Balancing geopolitics and energy security

India became the largest buyer of Russian seaborne crude after Russia’s 2022 invasion of Ukraine, capitalising on discounted barrels offered by Moscow. However, refiners began trimming purchases earlier this year following sustained pressure from Washington aimed at restricting revenues flowing to Russia.

Scaling back Russian imports also helped India avoid potential 25% US tariffs and contributed to progress toward an interim trade agreement between the two countries.

Government sources maintain that India’s overall energy position remains stable. Crude inventories continue to be replenished, and there is currently no shortage of LPG, LNG, or crude oil globally. Officials added that India is also engaging with alternative suppliers while closely monitoring developments in the Gulf to manage any potential supply disruptions.