Oil Prices Dip to $98 as US Ends Sanctions Waivers for India

Synopsis: Oil prices slide toward $98/bbl (Brent) as US-Iran talks revive and Washington ends sanctions waivers on Russian and Iranian oil, expiring April 11 and 19, hurting India’s cheap supply access.

Global energy markets face fresh uncertainty as diplomacy stalls and Washington tightens its grip on oil trade. Brent crude futures fell toward $98 per barrel on Tuesday. The drop came as fresh reports pointed to renewed US-Iran talks. Markets had gained in the previous session, but those gains quickly faded.

Brent crude opened lower and stayed under pressure through the session. The futures market pulled back sharply after climbing Monday. Traders responded swiftly to headlines around a possible Iran deal.

President Donald Trump confirmed that Tehran had reached out to Washington. Iranian President Masoud Pezeshkian also signalled openness to further talks. However, he set a condition any dialogue must follow international law. The two sides spent 21 hours negotiating over the weekend. Yet, they failed to reach a final deal. Trump then announced a blockade on Iranian oil shipments.

Meanwhile, a fresh OPEC+ report painted a grim picture of supply. The group’s output dropped by 7.9 million barrels per day in March. The shutdown of the Strait of Hormuz was the main reason behind the decline.

The Strait carries roughly 20 per cent of global crude and LNG. Its blockade left several vessels stranded at sea. The disruption sent shockwaves through global energy markets.

Investors are now watching the IEA’s upcoming monthly market report closely. The report is expected to provide clearer signals on global supply and demand. Analysts say it could shape market sentiment in the near term.

Washington added to market pressure with a major policy shift. The US announced it will not renew waivers that allowed India to buy Russian and Iranian oil. Treasury Secretary Scott Bessent confirmed the decision on Wednesday.

“We will not be renewing the general licence on Russian oil, and we will not be renewing the general licence on Iranian oil,” Bessent told reporters. The waiver on Russian oil expired on April 11. The Iranian oil waiver is set to expire on April 19. Both were short-term measures designed to ease rising global energy prices.

The waivers had allowed roughly 140 million barrels of Iranian oil to reach global markets. Indian refiners also placed orders for about 30 million barrels of Russian oil during this period. The move helped relieve pressure on energy supply during the war.

India stands as one of the biggest losers from this policy shift. New Delhi had relied on the waivers to secure cheaper Russian and Iranian oil. The move now forces Indian refiners to look elsewhere.

Major refiners like Reliance had already cut purchases from Russian firms earlier this year. That included suppliers like Rosneft and Lukoil. However, they reversed course and ramped up buying again once the waivers came through. At least two supertankers carrying Iranian crude docked at Indian ports during the waiver period. These were the first such deliveries in nearly seven years. At its peak, Iranian crude accounted for 11.5 per cent of India’s total oil imports.

After US sanctions tightened in 2018, Indian imports of Iranian oil stopped entirely by May 2019. India turned to Middle Eastern and US grades to fill the gap. Therefore, the waiver had opened a rare window one that Washington has now firmly shut.

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