US grants India waiver to buy stranded Russian oil

The US treasury has issued a 30-day waiver allowing Indian refiners to buy Russian oil cargoes already stranded at sea, as war in the Gulf disrupts energy flows. According to Reuters, treasury secretary Scott Bessent framed the measure as a stopgap to keep oil moving into the global market amid what he called Iran’s attempt to “take global energy hostage”.

The waiver lands after months of US pressure on New Delhi to curb purchases of Russian crude, a campaign meant to reduce revenue feeding Moscow’s war effort in Ukraine. Reuters reports that India had started reducing Russian buying in January under Washington’s pressure, and that cutting purchases helped New Delhi avoid 25% tariffs and secure an interim trade deal with the US. Now, with the Strait of Hormuz effectively closed and supply routes under stress, the priority shifts from sanction signalling to price stability.

India’s exposure is structural. Reuters notes that India’s crude stocks cover roughly 25 days of demand, and that about 40% of its oil imports come from the Middle East through Hormuz. When that corridor becomes uncertain, the cost of “doing the right thing” rises quickly. State refiners including Indian Oil, Bharat Petroleum, Hindustan Petroleum and Mangalore Refinery and Petrochemicals have been talking to traders for prompt Russian deliveries, Reuters reported, with one source estimating about 20 million barrels bought so far.

For Europe, the policy choice is not offered on similar terms. The EU has spent the past two years replacing pipeline gas with seaborne LNG and longer supply chains that are most sensitive to shipping insurance, freight rates and chokepoints. When Washington grants a targeted waiver to keep Asian demand supplied—explicitly to “alleviate pressure” on global markets—Europe still pays the same marginal price for LNG cargoes and rerouted shipping, but without the same leverage over exemptions.

The waiver is also a lesson in how sanctions work in practice. Bessent said it would not provide “significant financial benefit” to Russia because it only covers oil already at sea. But the immediate effect is to prevent a sudden demand shock in a market already strained by war risk and disrupted routes. The sanction regime remains intact on paper while the supply chain is quietly patched where the price pressure is most dangerous.

Reuters reported that India approached the Trump administration seeking approval to buy Russian crude because of the Iran conflict. The White House and India’s oil and foreign ministries did not immediately comment.

The waiver expires in 30 days. The tankers, and the price signals they carry, arrive sooner.