The US administration has granted India a temporary 30-day waiver to resume purchasing Russian oil, in a bid to ease tensions in the global energy market caused by the war with Iran and supply disruptions in the Middle East. The measure comes after Washington imposed 25% tariffs on India last year as punishment for acquiring Russian crude oil, a penalty that was withdrawn last month within the framework of a trade agreement. The temporary permit is intended to act as a relief valve at a time when the conflict in the Persian Gulf has raised concerns about global energy supplies. The price of US West Texas Intermediate (WTI) crude oil soared 8.5% this Thursday, to $81.01 per barrel, in its largest daily rise since May 2020, while Brent rose 4.9%, to $85.41. India, the world’s third-largest oil importer and one of the world’s major refining centers, had been reducing its purchases of Russian crude and replacing them with supplies from the Middle East. However, with Persian Gulf exports threatened by the conflict with Iran, the Asian country has once again sought shipments from Russia. According to Muyu Xu, senior crude oil analyst at energy analysis firm Kpler, Indian refiners have been actively seeking shipments of Russian crude in recent days and the country could have acquired between six and eight million barrels in just two or three days. From Washington, Treasury Secretary Scott Bessent has defended that the measure will have a limited impact on Moscow’s finances, since it only allows transactions related to Russian oil that is already loaded on ships and stranded at sea. In addition to this exemption, the US government is studying other measures to contain the rise in crude oil prices, including offering political risk insurance for oil tankers transiting the Persian Gulf. US oil prices have already accumulated increases of close to 20% so far this week due to the escalation of the conflict in the Middle East. The blockage of the Strait of Hormuz, through which approximately 20% of the world’s oil circulates, continues to be one of the main sources of concern. According to Kpler data, no oil tanker loaded with crude oil has crossed this strategic passage since last weekend, amid warnings from Iran and the sharp increase in the cost of marine insurance. In the short term, India has enough reserves to cover about 45 days of crude oil demand, according to Rystad Energy. However, analysts warn that if supply disruptions in the Middle East continue beyond the next few weeks, pressure on the global energy market could intensify.
