Russian Oil Imports to India: Amid the escalating conflict with Iran, the US recently said it is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil. US President Donald Trump had imposed 25 per cent punitive tariffs on India for buying Russian oil, with the administration asserting that Delhi’s purchases were helping fuel Russia’s war against Ukraine. However, how much relief is it for India and is this helping Moscow in any aspect?
Why Did the US Grant a Temporary Waiver to India?
“President Trump’s energy agenda has resulted in oil and gas production reaching the highest levels ever recorded. To enable oil to keep flowing into the global market, the Treasury Department is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil,” Treasury Secretary Scott Bessent said last week.
How Important Has Russian Oil Become for India?
Since 2022, India has been importing crude oil from Russia. While Russia accounted for only 0.2 per cent of India’s total crude imports in 2022, the share has risen substantially in subsequent years, a report by ANI stated.
“In February, India imported about 20 per cent of its total crude oil imports from Russia, amounting to around 1.04 million barrels per day,” government sources told news agency PTI.
What Did Donald Trump Say About the Waiver?
Meanwhile, Trump on Saturday responded to the announcement by Bessent on temporarily allowing India to purchase Russian oil.
“If there were some, I would do it just to take a little of the pressure off,” he said.
He added, “I think the oil pressure — there’s a lot of oil. We’ve got a lot of oil. Our country has a tremendous amount, and there’s a lot of oil out there. That will get healed very quickly.”
Is the Waiver a Big Relief for India?
However, the waiver offers limited relief for India.
According to a report by the Financial Times, citing Nomura, the available crude is a “drop in the ocean”, equivalent to only four days of India’s demand and therefore “helpful, but not a game-changer”.
Quoting data intelligence company Energy Aspects, the Financial Times said the buying “materially helps clear Russian crude and delays deeper upstream shut-ins”, but added that the US waiver would “do little to offset the global supply shock”.
Premasish Das, S&P Global’s head of Asia and the Middle East oil markets research, told the Financial Times that the US waiver does not materially offset the risks to India’s oil supply, as crude flows through the vital Strait of Hormuz remain almost blocked.
Why Is the Strait of Hormuz Crucial for India’s Energy Supply?
India sources nearly 40 per cent of its oil imports from the Middle East, with a significant portion transported through the strategically important Strait of Hormuz.
Notably, India is constantly reviewing its energy situation twice a day and remains in a comfortable position regarding its energy security. The country’s current stock position is also seen as comfortable, with supplies being replenished daily.
Is India Facing Any Immediate Energy Shortage?
Petroleum Minister Hardeep Singh Puri on Friday said there is no shortage of energy in India and no cause for concern for consumers. The minister discussed various aspects of India’s uninterrupted energy imports despite geopolitical challenges.
‘Our priority is to ensure the availability of affordable and sustainable fuel for our citizens, and we are doing it comfortably. There is no shortage of energy in India and there is no cause for worry for our energy consumers,’ the minister said.
Are India’s Existing Oil Stocks Enough to Meet Demand?
The country currently has access to diversified energy supplies exceeding the volume that could potentially be affected by disruptions in the Strait of Hormuz.
India’s existing stock of crude oil and petroleum products is also adequate to meet domestic demand.
Will the Waiver Benefit Russia Financially?
Bessent said the ‘deliberately short-term measure’ will not provide significant financial benefit to the Russian government as it only authorises transactions involving oil already stranded at sea.
“India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of U.S. oil. This stop-gap measure will alleviate pressure caused by Iran’s attempt to take global energy hostage,” Bessent said in a post on X.
What Exactly Does the US Treasury License Allow?
A statement from the Department of Treasury titled ‘Authorizing the Delivery and Sale of Crude Oil and Petroleum Products of Russian Federation Origin Loaded on Vessels as of March 5, 2026 to India’ said that “all transactions prohibited…that are ordinarily incident and necessary to the sale, delivery, or offloading of crude oil or petroleum products of Russian Federation origin loaded on any vessel, including vessels blocked under the above listed authorities, on or before 12:01 a.m. eastern standard time, March 5, 2026 are authorized through 12:01 a.m. eastern daylight time, April 4, 2026, provided that the delivery or offloading of such crude oil or petroleum products occurs at a port” in India and the purchaser of such crude oil or petroleum products is an entity organised under the laws of India.
Are There Any Restrictions Under the Waiver?
The general license issued by the Treasury Department said it does not authorise any other transactions or activities prohibited by any other Executive order, including any transaction or activity involving Iran, the Government of Iran, or Iranian-origin goods or services that is prohibited by the Iranian Transactions and Sanctions Regulations.
How Does This Fit Into the Broader US-India Trade Understanding?
Last month, the US and India announced they had reached a framework for an Interim Agreement on trade, and Trump issued an Executive Order removing the 25 per cent punitive tariffs on India, noting the commitment by New Delhi to stop importing energy from Moscow and increase purchasing American energy products.
(With agency inputs)
