The Trump administration issued a 30-day sanctions waiver on Iranian oil on March 20, General License U, authorizing the sale of crude already loaded and at sea before the cutoff date. It was meant to ease the energy crunch caused by the Hormuz blockade. Nearly a week later, nobody is using it. [1]

India's state refiners — Indian Oil Corporation, Bharat Petroleum, Hindustan Petroleum — have all declined to purchase Iranian crude under the waiver. The reasons are commercial, not political. With the Strait of Hormuz effectively closed, insuring a tanker transiting the war zone costs more than the crude is worth. Indian refiners have instead petitioned New Delhi to release strategic petroleum reserves, a request the Modi government is still evaluating. [2]

China's Sinopec, the world's largest refiner, has likewise passed. Beijing's calculus is different: Chinese firms are already buying Iranian crude outside the sanctions architecture entirely, settling in yuan through channels that predate the waiver by years. The sanctions waiver that was ticking toward April has become irrelevant to China's actual procurement strategy. Why accept a 30-day American permission slip when you have a permanent arrangement?

Iran's response was the bluntest. "There is nothing to release," a senior official told state media, arguing that Iran's oil was never meaningfully constrained by sanctions — only by the physical blockade of Hormuz, which Iran itself controls.

The real winner is Russian oil. With Middle Eastern crude stranded or rerouted, Russian tankers are picking up contracts that would have gone to Gulf producers. Urals crude is trading at a narrower discount to Brent than at any point since the Ukraine invasion. Tanker tracking data shows at least a dozen vessels originally bound for Indian refineries via the Gulf have been redirected to Russian loading terminals in the Baltic and Black Sea.

"If we've loosened sanctions on the country we're at war with, and the oil still isn't moving, we're running out of options," said Brent Erickson, a senior energy analyst at Rapidan Energy Group. The paradox is complete: the administration is simultaneously bombing Iranian infrastructure and offering to let Iran sell its oil. The market has noticed. Brent crude closed above $96 on Tuesday.

The waiver expires April 20. The question is not whether it will be renewed but whether it matters. Washington designed General License U as a pressure-release valve. It turns out the pressure is not in the sanctions. It is in the strait.

-- Priya Sharma, Delhi