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The United States has issued a temporary waiver to release approximately 140 million barrels of Iranian crude oil already at sea, framing it as a wartime economic weapon against Tehran. But the plan has hit an immediate wall. Iran has said that no surplus oil exists, and Indian refiners, though keen to buy, are waiting on government direction and payment clarity.U.S. Treasury Secretary Scott Bessent announced the waiver on Friday, saying Washington was moving to release approximately 140 million barrels of Iranian crude currently stranded in floating storage and in-transit tankers.The Office of Foreign Assets Control (OFAC) issued the 30-day waiver covering crude loaded on or before March 20 and to be discharged by April 19, the third such temporary relaxation since the U.S.-Israel war on Iran began on February 28.Bessent, speaking on Fox Business, was direct about the strategic intent behind the move. "In the coming days, we may ‘unsanction’ the Iranian oil that's on the water. It's about 140 million barrels. In essence, we will be using the Iranian barrels against the Iranians to keep the price down for the next 10 or 14 days, as we continue this campaign," he said, adding that the administration had "lots of levers."The U.S. had already executed a similar move with Russian crude, unsanctioning roughly 130 million barrels of Russian oil in floating storage, meaning the two waivers together could put approximately 260 million barrels of additional supply into global markets, what Bessent described as a "physical intervention" rather than manipulation of futures markets.Bessent also noted that the Iranian crude previously headed almost entirely to China, Iran's dominant buyer in recent years, purchasing at steep discounts. By releasing sanctions on these specific cargoes, Washington aims to redirect that oil toward broader global markets at market prices, thereby both easing supply pressure and cutting into Iran's revenue streams and pricing leverage.He also floated the possibility of tapping the U.S. Strategic Petroleum Reserve (SPR) as an additional lever if needed, while ruling out direct intervention in oil futures markets.Brent crude has surged to near $120 per barrel since the conflict escalated, driven further by Iran's strike on Qatar's Ras Laffan LNG facility and threats against broader regional energy infrastructure. The near-closure of the Strait of Hormuz, through which nearly one-fifth of the world's crude oil and LNG shipments normally pass, has created severe bottlenecks in global energy supply chains.For India, the waiver arrives at a particularly acute moment. The country has not imported Iranian crude since mid-2019, when an earlier U.S. sanctions waiver lapsed. At its peak before sanctions were reimposed in 2018, Iranian crude accounted for around 11.5% of India's total crude imports, with Indian refineries historically well-suited to processing Iranian Light and Heavy grades.Around 35–40% of India's crude oil needs are met through cargoes transiting the Strait of Hormuz. The effective closure of that route since the start of the conflict has disrupted supplies significantly, even as India works to ensure safe passage for its tankers.India, which maintains relatively smaller crude stockpiles than other major Asian importers, had already rushed to secure additional Russian crude supplies following an earlier U.S. waiver covering Russian oil.Three sources at Indian refining companies told Reuters they intend to buy Iranian oil but are awaiting directions from the government, as well as clarity from Washington on key operational aspects, particularly payment mechanisms, insurance cover, and logistics.Much of the Iranian crude at sea is carried on ageing vessels belonging to the so-called "shadow fleet," adding further complications. Some refiners also carry legacy contractual obligations with the National Iranian Oil Company (NIOC), though a significant portion of Iranian crude has in recent years been routed through third-party intermediaries.According to a report by Times of India, Sumit Ritolia, Lead Research Analyst for Refining and Modelling at Kpler, said Indian refiners retain the technical ability to reintegrate Iranian barrels with minimal operational adjustments, citing prior processing experience and established trading setups. However, he cautioned that any resumption of imports would depend largely on commercial viability and geopolitical developments."Key considerations include the scope and durability of sanctions relief including on shipping pricing structure, and the availability of payment, insurance and logistics mechanisms.If these conditions align, a ramp-up in Indian imports of Iranian crude could be significant, similar to the rapid increase observed in Russian crude intake following the easing of Western sanctions," Ritolia said.India is not alone in its calculations. Asia depends on the Middle East for roughly 60% of its crude imports, and several other Asian refiners are exploring whether they can access Iranian supplies, according to people familiar with the matter cited by Reuters. The near-closure of the Strait of Hormuz has forced some regional refiners to cut runs and reduce fuel exports.Before U.S. sanctions were reimposed in 2018, major buyers of Iranian crude included India, South Korea, Japan, Italy, Greece, Taiwan, and Turkey. Since then, China has emerged as the primary buyer. The latest waiver, if operationally viable, could reopen competitive buying interest across the region, with Ritolia noting that "India could emerge as a key demand centre to watch, alongside Chinese buyers and other Asian countries."The most significant complication, however, comes from Iran itself. Tehran's Oil Ministry has directly contradicted Washington's framing, saying it currently has "no floating crude or surplus available for international markets."In a statement issued through Iran's consulate in Mumbai, Iran said that Bessent's remarks appeared "aimed at reassuring buyers and managing market sentiment" rather than reflecting actual supply conditions on the ground.