US Treasury Secretary Scott Bessent said in a post on X that the Treasury Department will issue a 30-day sanctions waiver to enable Indian refiners to buy Russian crude so that oil continues to flow into global markets.
Refining companies typically benefit from access to cheaper crude imports as it lowers input costs and provides greater flexibility in sourcing supplies. In contrast, for upstream producers like ONGC and Oil India, the development is negative as lower crude prices directly reduce their revenue per barrel and can potentially compress profit margins.
The development comes after the White House indicated that steps were imminent to bring down oil prices, which have surged following the ongoing US-Iran conflicts in West Asia. Brent crude reached an intraday high above $86 per barrel on Thursday, while US crude prices topped $81. Following the remarks from the White House and the waiver announcement, US crude futures prices declined about 2.5%.
Bessent said the short-term measure will not provide significant financial benefit to the Russian government as it only authorises transactions involving oil that is already stranded at sea. He added that India remains an essential partner for the US and that the administration expects the country to ramp up purchases of US crude as well. According to him, the temporary move is intended to ease the pressure created by Iran’s actions in global energy markets.
Oil prices have rallied nearly 20% this week after the US-Iran conflict raised concerns over supply disruptions and the safety of cargo moving through the Strait of Hormuz, a critical chokepoint for global energy trade. Nearly 20% of the world’s crude supply passes through this narrow route, making the region crucial for global oil flows.
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