India imports 85% of its crude oil. In one week, the US turned off both taps that made it affordable.
On April 15, Treasury Secretary Scott Bessent announced Washington would not renew waivers allowing purchase of Iranian or Russian oil without sanctions. The Iranian waiver — which had let India buy Iranian crude for the first time in seven years — expired April 19. The Russian waiver initially lapsed too, though the administration reversed course on April 18 and extended it until May 16 under pressure from refiners. But the message was clear: both discount channels are closing.
Bessent’s alternative? Buy American. There’s a problem with that.
American Oil Doesn’t Fit Indian Refineries
US crude is light sweet shale oil from the Permian Basin. Indian refineries were built for heavier Middle Eastern and Russian grades. Switching means lower diesel yields — and diesel is India’s most consumed fuel. It also costs $15-20 more per barrel. For a country that saved an estimated $2.5 billion annually on discounted Russian crude, “buy ours instead” isn’t a solution. It’s a price hike dressed as diplomacy.
And the third route — through the Strait of Hormuz — is on fire. Iran fired on two Indian-flagged tankers on April 18. India summoned Tehran’s ambassador. The strait remains on lockdown.
What This Means at the Pump
Crude has crossed $100 per barrel. Petrol is already at ₹94.77 per litre in Delhi, diesel at ₹87.67. Truck operators are warning of the first diesel price hike in four years. When diesel rises, everything transported by road — which is most goods in India — rises with it.
Here’s the detail that reveals just how cornered India is: the Iranian oil it did manage to buy under the waiver was paid for in Chinese yuan through ICICI Bank’s Shanghai office. India’s energy security now routes through Beijing’s financial system.
The cheap oil era didn’t wind down. It was switched off — from three directions at once.