In response to Operation Epic Fury, Tehran turned to asymmetric leverage, relying on its capacity to disrupt shipping through the Strait of Hormuz and drive up global oil prices.
Anticipating market volatility, the US Treasury issued a targeted sanctions waiver designed to stabilize oil markets while preserving financial pressure on Tehran.
Yet as the waiver framework evolved from an India-specific mechanism into a more generalized policy, it continued in practice to serve Indian refiners, redirecting sanctioned crude away from China and toward India.
The Russian test case
On March 5, Treasury issued a waiver allowing Indian refiners — IOC, BPCL, HPCL, and Reliance Industries — to purchase already-produced Russian crude cargoes that were on the water.
When Treasury expanded the waiver on March 12–13, Indian refiners remained the only significant buyers of the authorized Russian barrels. The expansion continued to apply only to cargoes already on the water, did not restore formal banking channels, and did not lift underlying sanctions.
Miad Maleki, a former US Treasury official, described General License U as authorizing “the commodity transaction; it says nothing about payment.” The license permits the sale of oil but does not restore banking access or create a formal payment channel. That distinction allowed trade in physical barrels while preserving financial pressure.
The Iranian extension
The March 20 application of the same waiver model to roughly 170 million barrels of Iranian crude floating offshore replicated the policy — and once again, India remained the only swing buyer.
Reliance Industries, the largest Indian public company, purchased 5 million barrels of Iranian crude at a $7 premium to Brent. The same Indian refiners, IOC, BPCL, and HPCL, reportedly plan to resume purchases.
Homayoun Falakshahi, head of crude oil analysis at Kpler, said Iranian crude often remains unsold until reaching Asian discharge zones such as Singapore or Malaysia. Because many cargoes were already produced but waiting for buyers, releasing them under the waiver had immediate supply effects. He added: “Now that India has entered as a competitor, the price in China will most likely increase.”
In effect, India’s participation disrupted China’s near-monopsony over sanctioned Iranian crude — reshaping pricing leverage without formally lifting sanctions.
Before 2019, Indian refiners imported roughly 450,000 barrels per day of Iranian crude under contracts with National Iranian Oil Company. They retain the technical configuration and commercial familiarity to scale quickly within short waiver windows. That institutional memory gives Washington a ready-made alternative buyer base whenever it chooses to recalibrate supply pressure.
India’s strategic ascent
India’s admission into the Pax Silica, formalized on February 20, placed it within the US-led supply-chain initiative focused on reducing dependence on China in semiconductor and AI production. As Under Secretary Jacob Helberg said: "Pax Silica is really not about China, it is about America. We want to secure our supply chains. We view India as a partner to help de-risk and diversify those supply chains."
Prime Minister Narendra Modi visited Israel on February 25–26, where the two countries elevated ties to a “special strategic partnership.” Two days later, Operation Epic Fury began.
The new world order
Early in President Trump’s second term, Washington sought to reshape the global order. India was expected to become a counterweight to China, and Iran was given a chance for realignment. Neither objective materialized at the outset. India’s role remained limited, negotiations with Iran collapsed, and a 12-day war followed. Trade and tariff disputes further complicated the restructuring effort.
Washington’s tactical support of India’s energy role may carry implications beyond temporary oil supply management. Pax Silica realigns industrial supply chains; the waiver framework redirects sanctioned energy flows. Together, they position India within the technological and commodity axes of great-power competition.
This suggests a second, more structured attempt to reshape the global order. With India onboard, the decisive variable becomes whether Operation Epic Fury generates sufficient leverage to push Iran away from its long-standing partnerships with Beijing and Moscow. A realignment toward Washington could be the tipping point in the consolidation of this new order.