Trump’s Sanctions Waiver on Russian Crude and Oil Supply
In a significant shift, the Trump administration has allowed the sanctions waiver for Russian crude oil to expire, coinciding with a new understanding between the US and Iran aimed at establishing peace in the region. The waiver, which had been in place since the onset of the US-Iran conflict, has been crucial for countries like India that rely heavily on Middle Eastern oil supplies. President Trump hinted that sanctions on Russian oil could be reinstated once the Strait of Hormuz stabilizes and global oil supplies normalize.
Expiration of the Sanctions Waiver
The US Treasury confirmed that it did not extend the sanctions waiver for Russian seaborne oil, which expired at midnight. While President Trump and senior officials did not clarify the implications of this lapse, it raises questions about the potential reinstatement of sanctions. The waiver was initially introduced to assist vulnerable economies during the energy crisis by allowing access to Russian oil. With the recent memorandum of understanding between Washington and Tehran, the US may reassess its policy on Russian oil.
At the G7 summit in France, Trump refrained from providing a clear answer regarding the return of sanctions against Russia. He indicated that the administration is closely monitoring the situation and observing oil price trends, which have been declining. Trump suggested that reinstating sanctions could become feasible once oil supplies from the Middle East return to normal levels.
Implications for India
Since the onset of the Russia-Ukraine war in 2022, Russia has become a key supplier of crude oil to India, offering discounted rates as European countries restricted imports. At one point, Russian oil accounted for approximately 40% of India’s crude imports. However, following the sanctions imposed by the Trump administration in late 2025, India’s imports of Russian crude began to decline, reaching their lowest levels in several years by February.
Despite this decline, the conflict in the Middle East prompted India to increase its procurement of Russian crude, with imports nearing peak levels in 2023. The expiration of the sanctions waiver necessitates a reevaluation of India’s crude oil import strategy. Fortunately, India’s crude oil basket is diversified, encompassing around 40 countries. Additionally, once trade flows through the Strait of Hormuz normalize, Middle Eastern crude oil is expected to fill the gap left by declining Russian supplies.
Moreover, following the signing of the peace agreement, Iran is set to resume oil sales immediately. While it may take months to restore oil and gas flows to normal levels, India will gain access to Iranian crude without sanctions. Venezuela has also emerged as a significant supplier for India, and imports from the UAE remain robust despite disruptions in the Strait of Hormuz. Experts believe that Russian crude will continue to play a role in India’s oil imports, as not all Russian crude is subject to sanctions. The lapse of the sanctions waiver is unlikely to adversely affect India’s crude oil supply, provided that oil flows through the Strait of Hormuz return to pre-war levels and India maintains its diverse energy sources.
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