Oil and Gas Prices Surge as Hormuz Disruption Pushes India Toward Russian Crude
Oil and gas prices have surged sharply following Iran's effective closure of the Strait of Hormuz since the US-Israel-Iran war began on February 28, 2026.
Brent crude traded at $84.17–$84.59 per barrel on March 6, 2026 — up nearly 20% over one week; WTI (West Texas Intermediate) hovered near $79.5–$80 per barrel.
Analysts warn prices could reach $100 per barrel or higher if disruptions persist.
The US Office of Foreign Assets Control (OFAC) issued a temporary waiver allowing India to purchase stranded Russian oil and reroute it to Indian ports — the waiver expires April 4, 2026.
India's largest private refiner, Reliance Industries, has begun seeking Russian crude cargoes following the US waiver.
The conflict has improved Russia's competitive position in global crude oil markets, with India and China both moving to deepen reliance on Russian supply amid Middle East disruption.
The IRGC has prohibited vessel passage through the Strait of Hormuz, triggering the 2026 Strait of Hormuz Crisis.
The Strait of Hormuz: Geography and Strategic Significance
The Strait of Hormuz is a narrow waterway connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. At its narrowest point, it is approximately 21 nautical miles wide. It is the world's most critical oil chokepoint.
The Strait's closure is the proximate cause of the oil price surge. Its unique geography — controlled on one side by Iran — means any Iran conflict automatically creates an energy security crisis for all major oil importers, including India.
India's Oil Import Dependence and Energy Security
India is the world's third-largest oil consumer and importer, importing approximately 85% of its crude oil requirements. Pre-crisis, the top suppliers were Iraq (~23%), Saudi Arabia (~17%), Russia (~40% post-Ukraine conflict discount), UAE, and others.
India faces a double pressure: Gulf supply disrupted and Russian-route logistics also strained. The US waiver provides a short-term solution, but India's energy security requires structural diversification — exactly what the waiver highlights as currently lacking.
OFAC Sanctions Waivers: Mechanism and India's Exposure
The US Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions. It can grant specific licenses or general licenses (waivers) allowing otherwise-prohibited transactions for defined purposes and durations.
Key Details
- The waiver issued on March 6, 2026 allows India to purchase stranded Russian oil and petroleum products for a 30-day period (expires April 4, 2026).
- It applies to existing stranded shipments — not to new orders.
- Reliance Industries is the primary Indian private-sector beneficiary, as it has existing trade relationships for Russian crude.
- India's vulnerability: any country doing business with Iran faces a 25% tariff on all US business under Trump's executive orders — this constrains India's ability to revive Iranian oil imports as a Hormuz alternative.
- India's secondary sanctions exposure means it must balance energy security needs against the risk of losing US market access.
The OFAC waiver is a short-term diplomatic concession to India — recognition that forcing India to abruptly halt Russian crude during a Hormuz crisis would cause severe economic damage. It also illustrates how US sanctions architecture shapes India's energy options in real time.
- Brent crude on March 6, 2026: $84.17–$84.59/barrel
- WTI crude on March 6, 2026: ~$79.5–$80/barrel
- Weekly price increase: ~20% over one week
- Analyst price warning: could reach $100+/barrel if disruptions persist
- Strait of Hormuz daily oil flow: ~21 million barrels (~20% of global petroleum trade)
- Qatar LNG via Hormuz: ~30% of global LNG trade
- OFAC waiver for Russian crude: issued March 2026; expires April 4, 2026
- India's oil import dependence: ~85% of requirements are imported
- India's annual oil import bill (2024-25): ~$130 billion
- Russia's share of India's crude basket (post-2022): ~40%