The United States has issued a 30-day waiver, effective immediately until April 4, suspending sanctions to allow India to receive shipments of Russian crude oil. The waiver, granted by the Treasury Department's Office of Foreign Assets Control (OFAC), permits oil produced by sanctioned Russian companies to be delivered, provided it is offloaded at an Indian port. The notice explicitly prohibits any oil transactions involving Iran.

Context of Regional Conflict and Market Disruption

This decision comes amid significant disruption to Middle East oil supplies following a wave of U.S. and Israeli attacks on Iran and subsequent retaliatory strikes by Tehran. The conflict has effectively closed the Strait of Hormuz, a critical chokepoint for one-fifth of the world's seaborne crude and liquefied natural gas. This closure has contributed to a surge in crude oil prices, with benchmark Brent futures rising above $90 a barrel.

Background on U.S.-India Relations Regarding Russian Oil

The U.S. administration has had fluctuating positions on Indian imports of Russian oil. In August, it imposed 25% tariffs on Indian imports in response to the country's continued purchases. However, in October, it was stated that India's Prime Minister pledged to stop buying Russian oil to ease tensions. According to the International Energy Agency, Indian imports of Russian crude had already fallen to 1.1 million barrels per day in January, down from an average of 1.7 million bpd in 2025 and the lowest level since November 2022.

Market Analysis and Impact

Analysts view the waiver as a "relief valve" to compensate for the loss of nearly 20 million barrels per day of crude from Gulf producers due to the regional conflict, though it is noted that the exemption is "not nearly enough." Concurrently, the pricing dynamics for Russian oil have shifted dramatically. JPMorgan noted that Russian Urals cargoes destined for India in March and early April are being priced at a $4 to $5 per barrel premium to Brent crude, whereas in February they were sold at a $13 per barrel discount.