【Iran Crisis】U.S. Allows India to Purchase Russian Oil for 30 Days, Bessent: Only Applies to Loaded Russian Oil

As tensions in the Persian Gulf escalate and shipping through the Strait of Hormuz is disrupted, the U.S. government unexpectedly grants a 30-day limited sanctions exemption on Russian oil to prevent further oil price increases.

The U.S. Office of Foreign Assets Control (OFAC) issued General License No. 133 related to Russia: “Authorization for the delivery and sale of crude oil and petroleum products loaded onto vessels and originating from the Russian Federation, to India, until April 4, 2026.”

International oil prices remain stable, with Brent crude down 0.7% at $84.83 per barrel.

U.S. Secretary of the Treasury Janet Yellen explained on social platform X: “Allowing Indian refiners to purchase Russian oil is to ensure continued flow of oil into the global market.” She emphasized that this is a short-term measure and will not bring significant financial benefits to the Russian government, as it only applies to “crude oil transactions already at sea.” As of last weekend, about 9.5 million barrels of Russian crude oil were stranded in Asian waters.

Energy data tracking firm Kpler’s senior crude oil analyst Muyu Xu said, “I’ve heard that since last weekend, Indian refineries have been actively seeking spot Russian crude supplies.” She added that, according to “market rumors,” New Delhi may have purchased as many as 6 to 8 million barrels of Russian oil in the past two or three days.

Avoiding Competition for Crude Oil Purchases

Yellen also pointed out that India is an important partner of the U.S., and Washington “fully expects New Delhi to increase U.S. oil procurement.” Analysts noted that this statement contrasts sharply with the tough stance taken in the second half of last year. At that time, the Trump administration imposed a 25% secondary tariff on India for continued imports of sanctioned Russian oil.

As the world’s third-largest crude oil importer, India relies on overseas supplies for about 85% of its energy needs, nearly half of which come from the Middle East. Recent escalation of the Persian Gulf conflict has caused supply disruptions, forcing New Delhi to seek alternative sources. According to India’s Ministry of Petroleum, current crude oil reserves and in-transit stocks are enough to meet about eight weeks of demand. However, if the Strait of Hormuz remains blocked due to ongoing conflict, Indian buyers will have to compete with other Asian countries for limited resources.

Bloomberg Economics research indicates that this U.S. move comes less than a week after military actions against Iran, reflecting heightened concerns over market stability. This may pave the way for broader future easing of energy sanctions and also suggests that conflicts involving Iran could last for weeks or even months.

Russia Could Be the Winner in This Conflict

However, some analysts expect that the license will have limited immediate impact on global oil prices. The reason is that most of this Russian crude is traded at offshore prices (FOB), and many contracts were signed earlier. Even if prices rise, the actual benefits will mostly flow to middlemen rather than the Russian government.

Nevertheless, this temporary exemption still holds symbolic significance for Russia. Weeks ago, Moscow faced its most severe budget deficit since the invasion of Ukraine in 2022, with energy license revenues down by about 50% year-on-year, forcing the Kremlin to consider cutting domestic spending. Now, with Asian demand for Russian oil rebounding and some sanctions being relaxed, Russia may unexpectedly become a winner in this conflict.

Source: https://ofac.treasury.gov/recent-actions/20260305_33

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