After previously imposing 25% \u201cpenalty\u201d tariffs on India for buying Russian crude, which were revoked last month, the U.S. on Thursday granted New Delhi a 30-day waiver to continue purchasing crude from Moscow. The measure is described by U.S. Secretary of the Treasury Scott Bessant as a \u201cshort-term measure\u201d that will not provide \u201csignificant financial benefit\u201d to Russia, as it applies only to oil already stranded at sea.<\/p>\n
India is the world\u2019s fourth-largest refiner, the fifth-largest exporter of petroleum products, and the third-largest oil importer. The waiver is therefore viewed as relevant for global supply conditions at a time when the Iran war is disrupting flows from Gulf producers. Experts cited in the report note that India had been replacing Russian oil with Middle Eastern supply, but the conflict\u2019s impact on Gulf output is prompting New Delhi to again secure volumes from Moscow.<\/p>\n
Muyu Xu, senior research analyst for crude at Kpler, said Indian refiners have been \u201cactively seeking prompt Russian crude supplies since last weekend.\u201d Based on \u201cmarket chatter,\u201d Xu estimated that India may have purchased 6\u20138 million barrels of Russian oil over the past 2\u20133 days.<\/p>\n
Oil prices responded sharply to the evolving situation. On Thursday, West Texas Intermediate (WTI) surged 8.51%, or $6.35, to close at $81.01 per barrel, marking its largest single-day gain since May 2020. Global benchmark Brent crude rose 4.93%, or $4.01, to settle at $85.41 per barrel. On Friday, both benchmarks eased by more than 1%, with Brent last trading at $84.42 and WTI at $79.92 per barrel.<\/p>\n
U.S. crude prices have climbed about 20% this week amid the escalating conflict in the Middle East. The U.S. government is taking measures to curb rising oil prices, including offering political risk insurance for tankers transiting the Gulf. President Donald Trump stated on Thursday that \u201cfurther action to reduce pressure on oil is imminent.\u201d<\/p>\n
Traffic through the Strait of Hormuz, a key waterway for 20% of global oil flows, remains at a standstill following Iranian warnings and surging insurance costs for shippers. Despite the disruptions, India currently has access to about 100 million barrels of crude, enough to cover up to 45 days of domestic crude demand.<\/p>\n
What change did the U.S. make regarding India\u2019s Russian oil purchases?<\/strong> How have oil prices reacted to the Iran-related conflict?<\/strong> How significant is India in global oil markets?<\/strong> What steps is the U.S. taking to address rising oil prices?<\/strong>
The U.S. granted India a 30-day waiver allowing it to purchase Russian crude, after having revoked 25% \u201cpenalty\u201d tariffs on such imports last month.<\/p>\n
On Thursday, WTI rose 8.51% to $81.01 per barrel and Brent increased 4.93% to $85.41 per barrel, with U.S. crude up about 20% over the week before easing slightly on Friday.<\/p>\n
India is the world\u2019s third-largest oil importer, fourth-largest refiner, and fifth-largest exporter of petroleum products, making its crude sourcing decisions important for global supply.<\/p>\n
The U.S. is offering political risk insurance for tankers transiting the Gulf and, according to President Donald Trump, is preparing further actions to reduce pressure on oil prices.<\/p>\n