Crude Oil Falls In Early Trade After US Allows 30-Day Window To Purchase Russian Oil Amid Hormuz Blockade

The United States Treasury Department has given India a temporary 30-day waiver to buy Russian oil, aiming to ease supply strains caused by the Middle East conflict and Iran's blockade threats near the Strait of Hormuz, while officials in Washington stress the move is tightly limited and not designed to boost Moscow's earnings.

The April contract of the benchmark Brent crude on the Intercontinental Exchange was trading at $84.21 per barrel, down by 1.52 per cent from its previous close. Brent crude futures fell around 1% to around $84 per barrel on Friday, paring gains from previous session, according to Trading Economics.

US Treasury Secretary Scott Bessent announced the step in a post on X, describing it as a way to keep crude moving into world markets as disruptions spread. The waiver applies only to Russian shipments already at sea and headed to India, rather than new long-term supply deals or additional contracts.

US waiver India Russian oil: terms and Treasury's explanation

Bessent said, 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, underlining that the concession is time-bound. A Treasury general license sets strict conditions on which cargoes qualify and when transactions must be completed.

According to that license, crude oil or petroleum products of Russian origin must be loaded on any vessel on or before 5 March, 12:01 am EST, and can only be traded under the waiver until 12:01 eastern daylight time on 4 April, provided those cargoes are delivered to India rather than diverted elsewhere.

US waiver India Russian oil: limited scope and political context

Bessent stressed that the move is narrow and focused on oil already stranded. This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorises transactions involving oil already stranded at sea, Bessent said, framing the policy as a practical response to an immediate supply squeeze.

The Treasury Secretary also highlighted India's broader energy relationship with Washington. India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of US oil. This stop-gap measure will alleviate pressure caused by Iran's attempt to take global energy hostage, Bessent added, linking the waiver directly to Iran's regional actions.

US waiver India Russian oil: trade tensions and recent shifts

The decision follows a turbulent period in India-US trade ties over Russian crude. Months earlier, President Donald Trump imposed a 25% penalty on Indian exports to the US, responding to New Delhi's continued buying of Russian oil despite warnings. That pressure was withdrawn after an interim trade agreement between the two countries last month.

After the deal, US officials suggested India had halted Russian oil purchases, although New Delhi never confirmed any such halt. Reports later indicated flows had slowed rather than stopped, with India adjusting its sourcing mix while watching price trends, sanctions risks, and shipping routes affected by regional conflicts and maritime threats.

US waiver India Russian oil: import data and new purchases

Recent trade figures tracked by Reuters show India's imports of Russian crude dropped to about 1.1 million barrels per day in January, the lowest level since November 2022. State-run Hindustan Petroleum Corp has now resumed Russian purchases after a three-month pause, securing two cargoes expected to arrive later this month, according to two people cited by Reuters.