US to end Russian and Iranian oil waiver: How will India be affected?

The United States has chosen not to extend a temporary sanctions waiver that had allowed countries, including India, to continue purchasing Russian and Iranian oil under limited conditions. The decision signals a deliberate shift toward stricter enforcement and comes with a fresh warning: buy Iranian oil, and face consequences.

US Treasury Secretary Scott Bessent confirmed the move at a media briefing. "We will not be renewing the general licence on Russian oil and Iranian oil. That was oil that was on the water prior to March 11th. All that has been used," he said.

What the waiver covered, and why it is ending

The general licence was introduced as a temporary measure to allow oil already at sea before March 11 to complete its journey without triggering sanctions. On March 6, the US eased restrictions to let India import Russian crude stranded at sea. A week later, the relaxation was extended to other countries. On March 20, a separate provision permitted the delivery and sale of Iranian-origin crude and petroleum products already loaded onto vessels.

With those shipments now cleared, Washington has drawn the line. The waiver has served its purpose, Bessent indicated, and there will be no extension.

What it means for India

For India, which has been a significant buyer of discounted Russian crude since the Ukraine conflict began, the expiry of the waiver closes a window of operational flexibility. Indian refiners will now need to navigate purchases without the temporary cover the licence provided, and with the added risk of secondary sanctions if Iranian oil remains part of the mix.

The coming weeks, shaped equally by the Oman talks and Washington's enforcement posture, will determine how much room India and other buyers have to manoeuvre.

Meanwhile, the Trump administration has gone further, threatening to sanction any country that continues buying Iranian oil going forward. The warning appears aimed squarely at China, which has been a significant buyer of Iranian crude.

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Strait of Hormuz and the diplomatic track

The backdrop to these developments is volatile. Iran's blockade of the Strait of Hormuz, one of the world's most critical oil transit corridors, has severely disrupted global supply chains since the onset of the West Asia conflict, sending shockwaves through energy markets.

Yet even as Washington tightens the financial noose, diplomatic channels are quietly open. Oil prices dipped in early Thursday trading amid reports that Tehran may allow vessels to pass through areas around the Strait of Hormuz, a signal, however tentative, that some flexibility exists.

Both Washington and Tehran are preparing for a second round of peace talks in Oman.