Trump’s sanctions easing – India’s relief, China’s opportunity and Russia’s windfall

Iranian President’s assurance to Modi on Hormuz should improve oil supply further

By T N Ashok

NEW YORK: In the fog of war stretching from the Persian Gulf to Eastern Europe, a quiet recalibration of global energy policy is unfolding in Washington. The Donald Trump administration has moved to temporarily ease restrictions on Russian oil shipments already at sea, a measure designed to cool surging global energy prices after the U.S.–Israeli conflict with Iran disrupted one of the world’s most vital oil corridors.

The decision — narrow, temporary and controversial — underscores the fragile arithmetic now governing the global energy market: geopolitics, supply shortages and economic pressure colliding at once. At stake are not just oil prices but the economic stability of major energy importers such as India, the strategic ambitions of China, and the financial fortunes of Russia, whose energy exports remain central to its war economy.

The trigger for Washington’s decision lies in a narrow waterway barely 33 kilometers wide: the Strait of Hormuz. Roughly 20% of the world’s oil supply normally passes through the strait each day, connecting the energy-rich Persian Gulf with global markets.

Since late February 2026, however, the corridor has been gripped by escalating hostilities between Iran and the United States and Israel. Iranian strikes on commercial vessels and threats against shipping companies have slowed tanker traffic to a crawl.

The result has been immediate. Brent crude surged past $100 per barrel, briefly touching $119, its highest level since 2022.Insurance premiums for tankers traveling through the Gulf skyrocketed. Shipping companies rerouted vessels or suspended operations entirely. For global markets already sensitive to geopolitical shocks, the disruption created an abrupt supply crunch.

The United States scrambled to respond. The Trump administration unveiled a series of stopgap steps aimed at preventing the crisis from cascading into a full-blown global recession. The most immediate measure: temporarily allowing the purchase of Russian oil cargoes already in transit.

U.S. Treasury Secretary Scott Bessent said the authorization would last one month and apply only to petroleum shipments loaded onto tankers before the announcement. Roughly 124 million barrels of Russian crude are currently afloat on tankers worldwide.

By allowing those cargoes to reach buyers without triggering sanctions penalties, Washington hopes to increase available supply without formally dismantling its sanctions regime against Moscow.“This narrowly tailored measure allows countries to purchase Russian oil currently stranded at sea,” Bessent said.

Simultaneously, the White House is weighing additional steps: releasing 172 million barrels from the U.S. Strategic Petroleum Reserve, coordinating emergency releases with the G7, providing naval escorts to tankers navigating the Strait of Hormuz and waiving certain shipping regulations to ease domestic fuel distribution. None of these measures alone can restore lost Middle Eastern supply. But together they form a patchwork strategy aimed at calming market

The immediate beneficiary of the sanctions waiver is India, the world’s third-largest oil importer. Over the past four years, India has become one of the biggest buyers of discounted Russian crude after Western sanctions pushed Moscow to seek alternative markets. Before the Ukraine war in 2022, Russian oil accounted for less than 2% of India’s imports. Today it supplies more than one-third.

The new waiver allows Indian refiners to continue purchasing Russian cargoes despite U.S. financial restrictions. For New Delhi, the timing could hardly be more critical. India depends heavily on Gulf producers — particularly Saudi Arabia, Iraq, and the United Arab Emirates — whose shipments now face severe logistical disruptions due to the Hormuz crisis.

Refineries along India’s western coast have already reported tightening supplies of diesel and aviation fuel feedstock, forcing companies to scramble for alternative cargoes. By allowing Russian oil shipments to proceed, Washington effectively provided a pressure valve for India’s energy security.

While the waiver provides relief to India, it also creates a strategic opportunity for China. Beijing remains the largest importer of Russian crude, purchasing vast volumes through pipelines and maritime routes. With Western sanctions partially relaxed for oil cargoes already at sea, Chinese refiners could acquire additional barrels at discounted prices while global benchmarks remain elevated.

For China’s industrial economy — heavily dependent on imported energy — the development offers a moment of tactical advantage. It also underscores a broader geopolitical shift. Since the Ukraine war began, Russia has steadily redirected its energy exports eastward. Europe once purchased roughly half of Russian crude. Today the majority flows to Asia, particularly India and China.

The Hormuz crisis accelerates that realignment. For Moscow, the upheaval in global energy markets has produced an unexpected dividend. Russia remains the world’s second-largest oil exporter and holds the largest reserves of natural gas. High oil prices translate directly into increased revenue for the Kremlin — even when crude is sold at discounted rates. Russian officials have not concealed their satisfaction.

Following Washington’s announcement, Russian envoy Kirill Dmitriev declared that global markets were beginning to recognize the “destructive nature” of sanctions on Russian energy. The implication was clear: the world still needs Russian oil. Critics in Washington argue the sanctions waiver risks strengthening Vladimir Putin at a moment when Western governments are attempting to weaken Moscow’s ability to finance its war in Ukraine.“Looks like we fought Iran and Russia won,” Democratic Senator Brian Schatz wrote on social media.

Not all Western governments support Washington’s tactical shift. Officials in France and United Kingdom warned that easing sanctions risks undermining the broader effort to pressure Moscow. French President Emmanuel Macron argued that the Middle East crisis “in no way justifies lifting sanctions on Russia.”

British officials echoed the concern, saying the Kremlin must not interpret the energy crisis as an opportunity to expand its war machine. The disagreement highlights a widening divide between Washington and European capitals over how to balance energy security with geopolitical strategy.

The urgency of the White House response is also shaped by domestic politics. Fuel prices have long been a sensitive issue in the United States, and rising gasoline costs ripple quickly through the broader economy.

Higher oil prices translate into: more expensive transportation; rising airline fares; increased food and logistics costs; and inflationary pressure across consumer goods. With congressional midterm elections approaching later this year, the administration faces mounting pressure to prevent the energy shock from hurting American consumers.

In a message on social media, Trump acknowledged the temporary price spike but called it “a very small price to pay” for confronting Iran. For now, the global oil market remains suspended between crisis and adaptation. Tankers continue to wait offshore. Insurance costs remain volatile. Shipping through the Strait of Hormuz has yet to return to normal levels.

Analysts say the Trump administration’s sanctions relief may help moderate prices at the margin, but it cannot fully offset the disruption of Middle Eastern supply. The deeper question confronting policymakers is whether the conflict with Iran will expand — or stabilize. If the strait reopens and Gulf shipments resume, the current price spike could prove temporary. If not, the world may be entering a new phase of energy geopolitics, where sanctions regimes, regional wars and strategic alliances constantly reshape the flow of oil.

For now, the crisis has produced a strange alignment of interests: India gains breathing room. China strengthens its energy position. Russia collects higher revenues. The United States tries to keep markets calm.

And the global economy — dependent on a commodity still pumped from politically volatile regions — once again finds itself hostage to events unfolding thousands of miles from the world’s trading floors. (IPA Service)