Washington’s 30-day waiver granting India permission to buy Iranian crude for the first time in seven years expires today, and there is no indication that it will be renewed.
The exemption, granted in early March after the closure of the Strait of Hormuz, sent oil prices surging past $100 a barrel, allowing New Delhi to resume Iranian oil imports for the first time since 2019.
During the war, around four million barrels of Iranian crude had arrived in Indian ports, with a further four to six million barrels in transit and expected to complete discharge by today, according to Sumit Ritolia, lead research analyst at energy intelligence firm Kpler. State-run Indian Oil Corporation was among the buyers, taking roughly two million barrels in its first Iranian crude purchase in seven years, valued at approximately $200 million.
“That waiver will not be extended,” Mr Ritolia told The National, adding that India would revert to its prewar position of buying no Iranian crude.
The waiver was granted by the US Treasury Department just days after US and Israeli strikes on February 28 triggered Iran's closure of the strait. While engaged in a war with Iran, the US’s move to allow unrestricted sales of previously-sanctioned Iranian crude was seen as contradictory.
However, for US President Donald Trump, whose base is sensitive to high prices at the petrol pump, the decision was pragmatic. Treasury Secretary Scott Bessent called it a “stopgap measure” to alleviate pressure caused by “Iran's attempt to take global energy hostage”. He added that India was “an essential partner” expected to ramp up purchases of US oil instead. In essence, Mr Bessent said Washington would be “using the Iranian barrels against Tehran to keep the price down”.
The waiver was a lifeline for India, which was grappling with a severe cooking gas shortage. The country imports around 67 per cent of its liquefied petroleum gas, with nearly 90 per cent of that transiting Hormuz. India was also one of seven countries, alongside China, Russia, Iraq, Pakistan, Malaysia and Thailand, that Iran had granted free passage through the strait. The cargoes India received were not drawn from Iran's wartime floating inventory but from listings in January, February and early March, loaded before the unsanctioning window came into effect.
However, Indian tankers are now navigating increasingly dangerous waters. On Saturday, Iran's Islamic Revolutionary Guard Corps fired on two Indian-flagged vessels, Sanmar Herald and Bhagya Lakshmi, attempting to transit Hormuz. The VLCC Sanmar Herald came under fire from two Iranian gunboats despite having received prior clearance to pass. In radio transmissions captured by maritime intelligence firm TankerTrackers, a crew member could be heard saying: “You gave me clearance to go! You are firing now! Let me turn back!”
Despite the expiry of the waiver, Iran still holds an estimated 190 million barrels of crude at sea – a floating reserve worth more than $15 billion, Homayoun Falakshahi, head of oil analytics at Kpler, told The National. Iran’s inventory at sea will continue providing Tehran with a short-term revenue buffer even as the double blockade tightens.
“Iran can survive another few months,” Mr Falakshahi said. However, for India, the waiver's expiry limits its options to mitigate a raging fuel crisis.
