As the global fuel crisis continues to mount due to the fallout from the recent conflict involving Iran, the United States has taken another significant decision. The United States had earlier relaxed restrictions on the purchase of Russian oil. However, these exemptions expired on April 11. During that period, India’s imports of Russian crude saw a substantial increase, with Russia being one of India’s oldest and most trusted oil suppliers.
Why has the US refused to extend relief on Russian and Iranian oil?
The most recent announcement from the U.S. Treasury Department has now raised many eyebrows for India and other Asian nations. United States Secretary of the Treasury Scott Bessent on Wednesday (local time) said that the US will not renew the general license that allowed limited transactions involving Russian and Iranian oil amid ongoing geopolitical tensions.” During a media briefing, Bessent said, “We will not be renewing the general license on Russian oil and Iranian oil. That was oil that was on the water prior to March 11th. All that has been used.”
How will India be affected by the US decision on oil sanctions?
High levels of volatility currently exist in global oil markets, and countries such as India relied heavily on these sanctions exemptions to maintain energy security. The new decision is therefore likely to affect how India approaches future procurement strategies.
Meanwhile, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed fresh sanctions targeting what it described as “Iran’s illicit oil transportation infrastructure,” including around two dozen individuals, companies, and vessels, Al Jazeera reported. In a statement, the Treasury said the entities were part of a network linked to Iranian oil shipping figure Mohammad Hossein Shamkhani, the son of a senior adviser to Iran’s former Supreme Leader Ali Khamenei, according to Al Jazeera.
While announcing the waiver, 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. 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.”
In response to the US-Iran conflict that erupted in late February, crude oil prices increased to over $100 per barrel. In an effort to stabilise the global oil market, the Trump administration introduced a temporary policy. Under this, India was granted a 30-day special waiver on March 12 to continue purchasing Russian oil. This waiver only applies to shipments of oil that were already loaded onto vessels before March 11.
Is the US tightening its stance on Russia and Iran amid ongoing conflicts?
As per Al Jazeera, Secretary of the Treasury Scott Bessent said the Trump administration would continue to “cut off Iran’s illicit smuggling and terror proxy networks.”The announcement comes as part of the United States’ broader push to tighten economic pressure on Iran, particularly in the energy sector, even as the region grapples with instability and supply disruptions linked to the ongoing conflict. Earlier, the US Treasury Department had indicated that it does not intend to extend the temporary sanctions relief granted for Iranian-origin crude oil and petroleum products. The measure, introduced in March, was aimed at easing immediate supply concerns by allowing the sale and delivery of Iranian oil that had already been loaded onto vessels.
India will probably be forced to rely on Gulf Countries or rely on the US domestic market—both of which could prove more expensive. There’s a chance that lack of supply will create pressure on domestic prices of petrol, diesels, and LPG as well because of the shortages. India’s crude oil purchases from Russia more than tripled to 5.3 billion euros in March as volumes doubled and a surge in oil prices pushed up the import bill.
European think tank Centre for Research on Energy and Clean Air (CREA), in a report, said after a drop in purchases in February, India was back to a buying binge in March. “India was the second-highest buyer of Russian fossil fuels in March 2026, importing a total of EUR 5.8 billion of Russian hydrocarbons. Crude oil products constituted 91 per cent of India’s purchases, totalling EUR 5.3 billion,” it said. Coal (EUR 337 million) and oil products (EUR 178.5 million) constituted the remainder of their monthly imports. In February, India was the third largest importer, purchasing Russian hydrocarbons worth 1.8 billion euros, news agency PTI reported.
As we move forward, a serious continued exploration of alternatives may be pursued by India regarding its payment methods. One option may be the “rupee-ruble trade” method as a possible way to engage in business transactions with Russia, while at the same time not violating the sanctions imposed by the US government.
(With agencies inputs)
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