After imposing 25% "penalty" tariffs on India for buying Russian crude, which were removed last month, the US on Thursday granted New Delhi a 30-day waiver to purchase crude from Moscow while the Iran war disrupts global supply.
The West Texas Intermediate oil price rose 8.51%, or $6.35, to $81.01 per barrel on Thursday, the largest single-day gain since May 2020. Brent, the global standard, climbed 4.93%, or $4.01, to settle at $85.41 per barrel.
The waiver on acquiring Russian oil will help alleviate global supply concerns, as India is the world's fourth largest refiner and fifth largest exporter of petroleum products. Brent and WTI crude prices fell over 1% on Friday, closing at $84.42 and $79.92 per barrel, respectively.New Delhi, the world's third largest oil importer, had been supplementing Russian oil imports with Middle Eastern supplies, according to experts, but with the crisis impacting Gulf energy supplies, it is beginning to rely on Moscow.
"I've heard that Indian refiners have been actively seeking prompt Russian crude supplies since last weekend," said Muyu Xu, senior research analyst for crude at energy data tracker Kpler. He added that based on "market chatter," New Delhi is likely to have purchased up to 6-8 million barrels of Russian oil over the last 2-3 days.

This "short-term measure will not provide significant financial benefit" to Russia because it only authorises trades of oil that has already been stranded at sea, according to a post on X by US Treasury Secretary Scott Bessant.
The United States government is taking steps to contain soaring oil costs, including providing political risk insurance to ships transiting the Gulf. Crude oil prices in the United States have risen by roughly 20% this week as the Middle East war has escalated.
"Further action to reduce pressure on oil is imminent, and... in the long run, the actions we're taking will dramatically increase the region's stability and oil prices," US President Donald Trump stated on Thursday."It [the waiver] is a relief valve, in view of the loss of nearly 20 million barrels per day of crude from Gulf producers," said Vandana Hari, CEO of energy research firm Vanda Insights, adding that the 30-day waiver was "not nearly enough" and Washington continued to put "band aids on a gunshot wound."
Hari anticipates Brent crude to remain "creeping higher than the $80s" as she believes the prospects of the Hormuz embargo being eased fast are "extremely dim." Following Iranian threats and rising insurance costs for shippers, movement in the Strait of Hormuz, which transports 20% of global oil flows, has come to a halt.

According to Xu, there have been no laden crude tankers transiting the Strait of Hormuz since last weekend, including those destined for India.
Impact on India
On Thursday, Prateek Pandey, head of APAC oil and gas analysis at energy intelligence firm Rystad Energy, told CNBC's "Inside India" that India presently has "access to about 100 million barrels," which is enough to fulfil up to 45 days of crude consumption.
Pandey stated that Indian refineries will not be impacted for the next three to four weeks, but "there will be concerns" if the interruption in the Middle East extends beyond that time.
Sourcing from alternate destinations, such as Venezuela, presents issues because these shipments take about a month to arrive in India, he explained.India was slammed with 50% tariffs from the United States in August of last year, with 25% levied as punishment for acquiring Russian oil. Last month, the penalty was lifted on the condition that India reduce its imports from Moscow and buy more American energy. Washington threatened to reintroduce the punishment if India resumed buying Russian oil.
"I have not yet seen any increase in US crude arrivals into India," said Xu, adding that any boost in New Delhi's purchase of American oil following the trade agreement will be seen in April or May data.