The United States government has announced a temporary easing of sanctions to permit India to purchase Russian oil currently stranded at sea. This decision comes amid escalating tensions in the Middle East, particularly as threats loom over the Strait of Hormuz, a critical chokepoint for global energy supplies.
US Treasury Secretary Scott Bessent described the 30-day waiver as a “deliberate short-term measure” aimed at maintaining the flow of oil in the global market. The waiver allows India to access millions of barrels of oil and gas stranded near the Strait, a vital transit route for nearly half of India’s crude oil and gas imports.
Geopolitical Tensions and Energy Security
The situation has intensified following threats from Tehran to attack vessels attempting to pass through the Strait of Hormuz. This development follows the onset of hostilities between the US, Israel, and Iran, which began last Saturday. The US initially sanctioned Russian oil in response to Moscow’s invasion of Ukraine, urging countries like India to reduce their reliance on Russian energy.
Bessent emphasized that the waiver is designed to “alleviate pressure caused by Iran’s attempt to take global energy hostage,” and noted that it would not provide significant financial benefits to Russia, as it only authorizes transactions involving oil already stranded at sea.
Impact on India’s Energy Supply
The indefinite halt in supplies has sparked fears of an impending energy crisis in India, where crude oil and gas stocks are estimated to last for about 25 days. Meanwhile, US President Donald Trump has warned that the conflict with Iran could extend for four to five weeks or longer.
On Wednesday, Petronet LNG, India’s leading gas importer, issued a force majeure notice to its supplier, QatarEnergy, and its local buyers after its LNG tankers were unable to reach the loading terminal at Ras Laffan in Doha. Additionally, the Gas Authority of India Ltd (Gail) and Indian Oil Corp (IOC) have begun reducing gas supplies to industrial customers, according to Reuters.
India imports 90% of its crude, with about half of this—2.5 to 2.7 million barrels a day—passing through the Strait of Hormuz from countries like Iraq, Saudi Arabia, the United Arab Emirates, and Kuwait.
Expert Insights and Economic Implications
Experts warn that a supply crunch due to the closure of the Strait could lead to inflation and increase India’s fiscal deficit. With the waiver in place, approximately 145 million barrels of Russian crude, which remain on the water, could potentially be redirected toward Indian ports if commercial deals are finalized, according to Sumit Ritolia, lead research analyst at Kpler.
“However, the waiver does not fundamentally change India’s structural exposure to Middle Eastern supply flows,” Ritolia added, highlighting the ongoing vulnerability of India’s energy supply chain.
Russian oil constitutes an estimated 20% of India’s total imports, marking a notable shift in the US approach to India’s Russian oil imports.
Historical Context and Future Outlook
Historically, the US has pressured India to reduce its purchase of Russian oil, citing concerns over funding Russia’s military actions in Ukraine. Not long ago, President Trump imposed 50% tariffs on India, including a 25% levy for importing oil from Russia, alleging that India’s purchases were aiding Russia’s war efforts.
India has consistently defended its energy transactions, asserting its right to meet the energy needs of its vast population through trade with its partners. Since late 2025, India has reportedly reduced its imports of Russian crude and increased its purchases from the US.
The recent waiver represents a pragmatic shift in US policy, acknowledging the complex geopolitical landscape and the necessity of maintaining global energy stability. As the situation unfolds, the international community will be closely watching how these developments affect global oil markets and geopolitical alliances.
