US President Donald Trump hinted at keeping all options open to help ease rising crude oil prices while expressing confidence that inflation would decline once the ongoing conflict with Iran comes to an end. When asked by ANI if he would extend the waiver on sanctioned Russian oil to help ease crude prices, Trump told ANI, "We're going to do whatever is necessary, and as soon as this war is over, which will not be long, you're going to see oil prices drop and see a stock market, which is already at the highest point in history, go through the roof." The United States had eased sanctions on Russian oil in mid-March to counteract global oil shortages resulting from the closure of the Strait of Hormuz, with the relief originally scheduled to expire on April 11 but later extended to May 16. Trump has tapped into America's Strategic Petroleum Reserve, directed a boost in domestic oil production and loosened American shipping laws, while also authorizing temporary lifts in sanctions on oil from Iran and Venezuela.
Russian Foreign Minister Sergey Lavrov has reassured India that it will continue to receive Russian energy supplies in spite of what he called 'unfair external competition'. According to reports, Lavrov emphasised that the relationship between Russia and India is based on strong friendship and is unbreakable. Before his trip to New Delhi, Lavrov lauded Prime Minister Narendra Modi in an interview with RT India, describing him as one of the world's most dynamic leaders. According to Lavrov, Russia would make sure that India's interests related to Russian energy supplies are completely safeguarded and that current agreements won't be impacted by outside pressure. Moscow has continuously fulfilled its energy obligations to India and other partners, he continued. The diplomatic assurance comes as India faces uncertainty over the US waiver extension, with the US not yet confirming whether it will extend the waiver that allows countries, including India, to keep buying certain barrels after May 16.
Indian refiners are currently importing Russian oil at unprecedented levels as the US waiver allowing Russian oil purchases is set to expire on May 16. According to Kpler data reported by NDTV, daily inflows have reached an unprecedented 2.3 million barrels so far in May, with full-month flows predicted at 1.9 million barrels per day. The waiver, originally issued on March 5 as an India-specific measure, was later broadened globally and has been extended multiple times. However, if no new vessels with Moscow's crude are seen headed to India, full-month flows may drop to the predicted 1.9 million barrels per day. The US curbs against Russian oil were part of efforts by Washington to raise the pressure against Moscow over its invasion of Ukraine, reflecting the trade-offs the Trump administration has been forced to adopt for its war against Tehran.
India's two largest state refiners, Indian Oil Corp. and Bharat Petroleum Corp., have significantly accelerated their diversification efforts ahead of the waiver expiry. According to traders familiar with the matter, these refiners have begun sourcing crude from West Africa and the US this week, with these being prompt cargoes scheduled to load as soon as this month. BPCL has also begun exploring short-term supply agreements for Azeri and African grades to reduce dependence on Persian Gulf supplies, as reported by ETEnergyworld. As reported by latest developments, Indian oil refiners are reportedly exploring alternative crude supplies from West Africa, the US and Azerbaijan to manage energy security risks amid the Iran conflict disruptions.
The Iran war has significantly disrupted crude flows from the Persian Gulf to major buyers, including India, the third-largest crude importer globally. As reported by NDTV, if the US waiver isn't extended, Indian processors could be forced to source alternative, pricier spot barrels. Brent futures traded above $108 per barrel on Wednesday, representing a 78% increase this year. Trump has claimed that the US economy was poised for what he described as a "Golden Age," adding that the inflationary pressures would ease sharply after the conflict. He hinted towards a "gusher of oil" which would eventually result in a lowering of inflation, stating that "you're going to see inflation go down to probably 1.5%" once the war ends. The oil market disruption reflects the broader geopolitical tensions affecting global energy supply chains, with the US curbs against Russian oil being part of efforts to raise pressure against Moscow over its invasion of Ukraine.
