The decision was announced by US Treasury Secretary Scott Bessent, who said the move will help stabilise crude prices which have skyrocketed due to the disruptions in the Strait of Hormuz, a key shipping route in the Persian Gulf.
Oil (Photo taken June 2, 2017) | (Xinhua/Bai Xueqi) (dtf/IANS)
In a much-needed relief to India and several other countries, the Donald Trump administration would extend for 30 days a sanctions waiver on purchasing Russian oil, considering extension requests from several nations amid the West Asia crisis.
The decision was announced by US Treasury Secretary Scott Bessent, who said the move will help stabilise crude prices which have skyrocketed due to the disruptions in the Strait of Hormuz, a key shipping route in the Persian Gulf.
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“US Treasury is issuing a temporary 30-day general license to provide the most vulnerable nations with the ability to temporarily access Russian oil currently stranded at sea,” Bessent said on X.
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He said, “This extension will provide additional flexibility, and we will work with these nations to provide specific licenses as needed. This general license will help stabilize the physical crude market and ensure oil reaches the most energy-vulnerable countries.”
The US Treasury Secretary further added that the decision will also help reroute existing supply to countries most in need by reducing China’s ability to stockpile discounted oil.
What the waiver means for India?
India is reeling under a massive energy crisis due to the disruption in the Strait of Hormuz, a key shipping route which roughly handles around 20 per cent of the global energy supply.
Last year, well before the Iran war broke out, the US imposed 25 per cent additional penalty tariffs on India for purchasing Russian oil.
Announcing the decision, US President Trump had alleged that India was funding the Ukraine war by purchasing Russian oil.
However, weeks before the Iran war, Trump spoke to Prime Minister Narendra Modi and announced the highly-anticipated free-trade agreement with India. He also removed the additional 25 per cent penalty tariffs, claiming Modi has agreed to stop purchasing Russian oil.
On February 28, US and Israel waged a war against Iran, prompting a strong retaliation from the Islamic Republic. Tehran also closed the Strait of Hormuz, warning that all ships passing through the chokepoint waterway without permission will be destroyed.
Iran also targeted energy infrastructure in several Gulf countries, resulting in the shutdown of key gas and oil processing units in the region.
The disruption of energy supply through the Hormuz Strait triggered a global energy crisis of an unprecedented scale, affecting several countries, including India.
This prompted the US to announce a 30-day sanctions waiver in March, allowing India and other countries to purchase Russian oil.
While the move didn’t bring immediate respite in crude prices, it did help India to firm up its energy stocks.
According to reports, Indian refineries ordered around 30 million barrels of Russian oil during the first US waiver.
After PM Modi’s appeal for austerity measures, including reducing the consumption of petrol and diesel, it became evident that the country’s oil reserves were under intense pressure.
The sanctions waiver will give India a much-needed option to stockpile Russian oil
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