India faces major oil shock as Trump refuses Russian crude waiver extension, fuel prices may rise

Amid the growing Hormuz crisis and escalating tensions between the United States and Iran, India is facing another major concern from the global crude oil market. A recent decision by US President Donald Trump has triggered fears of another sharp rise in petrol and diesel prices in India.

In the middle of the global oil crisis and military tensions involving Iran, the Trump administration has decided not to renew the temporary exemption that allowed the purchase of Russian crude oil. The waiver officially expired on May 16. The US decision is being viewed as a major economic setback for India.

Back in March 2026, when tensions between the US and Iran intensified and blockade-like conditions emerged around the Strait of Hormuz, the Trump administration had temporarily relaxed restrictions on Russian oil tankers to maintain global oil supply. However, several European nations opposed the move, arguing that revenue from oil sales was helping Russia strengthen its war funding. Under growing international pressure, the US has now withdrawn the exemption.

After oil supplies from the Middle East reportedly dropped by nearly 61%, India increasingly depended on discounted Russian crude oil to meet domestic demand. During March and April 2026, Russia emerged as India’s largest oil supplier, with India importing nearly 1.57 million barrels of crude oil per day. With tighter American restrictions now expected, securing uninterrupted and cheaper Russian oil could become significantly more difficult for India.

India had already increased petrol and diesel prices by ₹3 per litre in recent days, along with a hike in CNG prices. According to economic experts, if global crude oil prices continue to rise due to the geopolitical tensions, government-run oil companies may once again be forced to raise fuel prices in the country, further increasing the burden of inflation on the common public.