As per a report by Bloomberg, State Bank of India (SBI) is currently not ready to process payments for Russian oil. This decision has been taken even after the US government gave a temporary waiver that allows India to continue importing Russian oil.
According to people familiar with the matter, SBI is unsure how long this permission from the US will remain in place. Because of this uncertainty, the bank is being cautious.
Sources also said that SBI believes handling such transactions could expose the bank to risks. The bank has a large loan portfolio in international markets, and it does not want to take any step that could harm its global reputation.
The sources shared this information anonymously because the matter is private. When Bloomberg News asked SBI for a comment, the bank declined to respond.
Explainer: Iran–Israel War and Why the US Allowed India to Buy Russian Oil
What is Happening in the Iran–Israel Conflict?
Tensions in the Middle East have increased due to the ongoing conflict between Iran and Israel. Military strikes and rising hostilities have created instability in the region. Because the Middle East is one of the world’s biggest oil producing areas, any conflict there quickly affects global oil supply and prices.
Why the Strait of Hormuz Matters
A large portion of the world’s oil passes through the Strait of Hormuz, a narrow sea route near Iran. If tensions rise or shipping is disrupted in this area, oil supply around the world can be affected. Countries that depend on imported oil, including India, become concerned about shortages and price increases.
Why the US Allowed India to Buy Russian Oil
Due to the Russia–Ukraine war, the United States and some Western countries had placed sanctions on Russian oil. However, because global oil supply became uncertain during the Middle East tensions, the US provided a temporary waiver allowing India to purchase certain shipments of Russian oil.
Why Russian Oil is Important for India
India imports around 85% of its crude oil needs from other countries. Russian oil has become an important source for India because it is often available at discounted prices compared to other international suppliers.
Impact on Global Oil Markets
The Iran–Israel conflict, combined with sanctions on Russia, has created uncertainty in global energy markets. Governments are trying to balance political tensions with the need to maintain stable energy supplies and prevent major increases in fuel prices.
Conclusion
The situation shows how geopolitical conflicts can directly impact global oil supply. Temporary policy changes, such as the US waiver for India, are often used to ensure that countries continue receiving the energy they need while international tensions remain high.
