US Allows India to Buy Russian Oil Amid Escalating Iran Conflict

The US Treasury Department has granted a 30-day waiver, allowing Indian refiners to purchase a consignment of Russian crude oil currently stranded at sea. Secretary Scott Bessent stated this is a temporary measure aimed at preventing disruptions to global oil supplies, following Iran's blockade of the Strait of Hormuz. Kuwait has cut production, pushing oil prices up 5% to over 90 USD/barrel on Friday. Qatar's Energy Minister warned that the conflict could drive oil prices to 150 USD/barrel. India imports approximately 40% of its crude oil through the Strait of Hormuz and only has reserves for about 25 days.

This is one of the most complex geopolitical moves Washington has had to make since the Iran conflict erupted: simultaneously sanctioning Russia over Ukraine while greenlighting India to purchase Russian oil to avert a global energy crisis. Bessent intentionally framed this as a technical measure — applying only to oil "already at sea," not authorizing new imports. But in reality, the message is clear: when oil prices threaten to disrupt the global economy, sanctions against Russia can be set aside. Global Witness is not wrong in criticizing that Washington and Israel themselves triggered this crisis with airstrikes on Iran, leading to the blockade of the Strait of Hormuz — only to then mitigate the consequences by injecting more money into the Kremlin's war chest. It's a frustrating vicious cycle. On India's part, New Delhi is playing its cards very skillfully. Previously, they faced pressure from Washington to reduce Russian oil purchases in exchange for a temporary trade agreement and to avoid a 25% tariff. Now, Washington itself is proactively knocking on New Delhi's door, asking for permission for them to buy Russian oil. The balance of power has shifted. In the market, Deutsche Bank believes this is only a short-term stopgap solution. Russia is unlikely to be able to increase production further. China imported record levels of Russian crude last month — the market share is being stretched thin. The Strait of Hormuz crisis is forcing the entire global energy structure to reposition itself. Europe is considering cutting energy taxes. The UK is looking into interventions to protect consumers.

Those who send monthly remittances to Vietnam will feel it most directly: as oil prices surge, inflation in the US rises, meaning an increase in living costs and a reduction in the portion of money available to send home. Vietnam is heavily dependent on energy imports, so the oil price shock will also directly impact prices back home. Vietnamese-American real estate investors in Southern California, Houston, and Texas also need to monitor closely: mortgage rates could be driven up if energy inflation returns, slowing down the market.