Oil prices drop over 30-day US waiver for Indian refiners to buy Russian crude

NEW DELHI — After a surge of over 15 per cent since last week when the US-Israel and Iran war began, oil prices dropped early on Friday after the US said it would allow a 30-day waiver for Indian refiners to purchase Russian oil stranded at sea.

The April contract of the benchmark Brent crude on the Intercontinental Exchange was trading at $84.21 per barrel, down by 1.52 per cent from its previous close.

The West Texas Intermediate on the Intercontinental Exchange fell 2.10 per cent to $79.31 a barrel in the early trade.

The 30-day waiver by the US eased tensions for the global oil supply chain amid disruptions around the Strait of Hormuz. The US announcement may allow further flexibility to Indian refiners to source more Russian crude.

Also read: Oil prices cross $83 per barrel as Middle East tensions escalate

"To enable oil to keep flowing into the global market, the Treasury Department is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil. This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorises transactions involving oil already stranded at sea," said US Treasury Secretary Scott Bessent.

The US had earlier said that it may deploy naval escorts for oil tankers passing through the Strait of Hormuz if necessary, as the conflict with Iran raised concerns about global energy supplies and shipping security in one of the world’s most critical maritime corridors. The White House also stated that recent actions against Iran could ultimately improve the stability of global energy markets.

India imports nearly 90 per cent of its oil requirement through imports.

According to data from global ship tracking firm Kpler, in February, Russia supplied 1.04 million barrels of oil per day (bpd) on an average, followed by 1 million bpd by Saudi Arabia and 980,000 bpd by Iraq,