How it affects India

India was a major beneficiary of the waivers  put in place by the US, as they permitted New Delhi to continue to buy of Russian oil amid supply disruptions at the Strait of Hormuz.

The US-Israel war against Iran has resulted in the largest-ever disruption of ⁠energy supplies due to Iran’s interruption of traffic through the strait, which provides a passage for 20% of the world’s oil ⁠and liquefied natural ‌gas shipments.

Amid a major disruption in oil supplies from West Asia since February 28, India’s rapid ramp-up of Russian oil imports significantly cushioned the supply hit throughout last month. India’s Russian oil imports in March reached historic peaks and a similar trend is expected in April as well, according to tanker data and industry insiders and experts.Mofre

In addition to that, the waivers on US sanctions also facilitated India to receive at least two tankers carrying Iranian crude that sail to Indian ports, marking the first such shipment in nearly seven years.

Now, removal of waivers on sanctions on the purchase of Russian oil will remove the cushion of discounted Russian crude import which has been crucial in managing India’s import bill. India. This disruption in the supply chain will necessitate India to find alternate suppliers other than Russia or Iran, and can also push the domestic oil prices up and markets down south.

Again, if India continues to buy Russian or Iranian oil without waiver, it may expose Indian firms to financial penalties from the Washington.

India will also be exposed to increased pressure from the US to adhere to sanctions, thereby hampering its efforts to balance out economic interests with energy security.

What happened this week

As the US and Iran failed to reach any agreement after Islamabad talks earlier this week, Washington imposed a blockade at Iranian ports that its military said has completely halted trade going in and out ​of the country by sea.

Meanwhile, the global markets turned optimistic Thursday over a probability of Iran allowing ships to transit through the Strait of Hormuz. Oil prices dropped in early trade as hopes of de-escalation US-Iran tensions cooled down concerns over ongoing supply disruptions. Brent crude futures slipped 44 cents, or 0.5%, to $94.49 a barrel at 0021 GMT. US West Texas Intermediate crude futures fell 70 cents, or 0.8%, at $90.59 a barrel.