In Major Win For Putin, US Grants Russia License To Sell Oil To India While Strait Of Hormuz Is Blocked
The world desperately needs oil, but can't get it as 20% of it is literally stuck behind the blockaded Straits of Hormuz. Putin has tons of oil because sales are metaphorically stuck by US sanctions. If the world does not get access to oil soon enough, there will be a global recession or worse, and every day the price of oil rises by 5%.
What to do?
Lightbulb moment: why, remove Russia's sanctions to one of the countries most in need - India - and bring the excess oil to those who have the most urgent need for it, allowing the price to fall and removing much of the leverage Iran has by keeping prices sky high.
That's what happened late on Thursday, when the US issued a general license to allow for some Russian oil sales to India, giving the nation more options to purchase fuel as an escalating conflict in the Persian Gulf cuts off a major producing region.
The license lasts a month (which hints at how long the operation against Iran will likely last according to the Admin) and covers transactions related to the sale of Russian crude oil and petroleum products loaded onto vessels before March 5, so long as it’s delivered to India and purchased by an Indian firm. The measure expires April 4 at 12:01 a.m. Washington time.
The move is another U-turn, and comes months after President Donald Trump slapped tariffs on Indian goods in a bid to pressure Prime Minister Narendra Modi’s government to abandon energy purchases from Russia, which India never did.
"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,” US Treasury Secretary Scott Bessent said in a post on X. “This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorizes transactions involving oil already stranded at sea.”
President Trump’s energy agenda has resulted in oil and gas production reaching the highest levels ever recorded.
— Treasury Secretary Scott Bessent (@SecScottBessent) March 6, 2026
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.…
Which reminds us: just a few days ago we pointed out that there are hundreds of millions of barrels of oil stuck at sea on various embargoed tankers, and that whoever managed to deliver those to a final destination would make an absolute killing...
3 days later, Goldman went and charted it https://t.co/9O6rSXcOhz pic.twitter.com/0PLe4CJkDA
— zerohedge (@zerohedge) February 23, 2026
We now wait to see if Vitol indeed becomes the merchant bank of choice for the next month's (with unlimited extensions) Russia-to-India transfers.
According to Bloomberg, Indian state refiners and government officials met earlier this week to consider contingency measures including turning to Russian cargoes loitering near its waters. The oil ministry had pushed for diplomats to seek some room for maneuver from Washington.As we pointed out recently, after China, India is the second country most reliant on gulf oil.
India became the single most important buyer of Moscow’s seaborne crude after the invasion of Ukraine, but the country has pretended to cut back in response to US pressure, particularly after a US trade deal struck last month that rolled back punitive tariffs. The reality is that India still continues to buy copious amounts of Russian oil and today's decree will only make it official.
Meanwhile, in other market moving news, Reuters reported that China - both Iran and the Gulf's biggest energy client - is in talks with Iran to allow crude oil and Qatari liquefied natural gas vessels safe passage through the Strait of Hormuz. As we discussed yesterday, China, which has friendly relations with Iran, has funded and armed the regime, and relies heavily on Middle Eastern supplies, is unhappy about the Islamic Republic's move to paralyze shipping through the Strait and is pressing Tehran to allow safe passage for the vessels.
Since China gets about 45% of its oil from the Strait, should Iran agree to allowing Chinese ships through, and should Russia be able to fully supply India's needs, and if Saudi Arabia can reroute as much as 7 million bbl/d from the gulf to Yangbu via the East-West pipeline, as we touched upon earlier...
... and suddenly the Hormuz blockade will seem far less ominous, as most of the oil blocked finds alternative ways to continue on its way to its final destination.