India Explores Alternative Payment Methods for Russian Oil Amid US Waiver

India is making significant changes to its oil purchasing strategy by seeking alternatives to the US Dollar for payments to Russia. Following a waiver from the US, Indian refiners have booked substantial quantities of Russian oil while exploring various currencies for transactions. This shift comes amid rising geopolitical tensions and supply disruptions due to conflicts in the region. The article delves into the implications of these changes, including the potential impact on global oil prices and India's energy strategy moving forward.

By Narendra Chaudhary Mar 25, 2026, 20:06 IST

India's Shift in Oil Purchasing Strategy

In a significant move, India is turning to Russia, one of its longstanding allies, for oil purchases following a waiver from the United States allowing such transactions. The nation is actively seeking alternatives to the US Dollar for these payments, aiming to lessen its dependence on the dollar amidst escalating geopolitical tensions and changes in US foreign policy. Reports indicate that Indian refiners have secured approximately 60 million barrels of Russian oil scheduled for delivery next month, with prices set at premiums ranging from $5 to $15 per barrel over Brent crude.

According to a Bloomberg report, these transactions are being executed by depositing Indian rupees into special overseas accounts held by Russian sellers, which are subsequently converted into either UAE dirhams or Chinese yuan. Some Indian banks, despite having limited offshore operations, are facilitating these trades. Additionally, Indian companies are contemplating the use of the Singapore dollar and Hong Kong dollar, although the feasibility of these transactions varies based on the comfort levels of individual banks.

Following significant supply disruptions due to the conflict in Iran, which has affected the vital Strait of Hormuz, Indian firms have increased their oil acquisitions, pushing global crude prices above $100 per barrel.

US Waiver on Russian Oil Purchases

The US has granted India a waiver to enhance its purchases of Russian oil, with the deadline set for April 11. Some Russian oil companies are advocating for more sustainable arrangements, seeking payments in alternative currencies to mitigate risks associated with fluctuating US policies. In a related development, Reliance Industries has acquired 5 million barrels of Iranian crude oil shortly after the US waiver was issued, with prices set at a premium of approximately $7 per barrel over ICE Brent futures. The delivery timeline for this oil remains unclear, as reported by Reuters.

Recent preliminary data from the Ministry of Commerce and Industry reveals that India imported $1.98 billion worth of crude oil from Russia in January 2026, marking the lowest import level in 44 months. Russia's share of Indian oil imports dropped to 19.3% in January 2026, the lowest since December 2022. On February 6, former President Donald Trump reduced tariffs on Indian imports from 50% to 25%, eliminating the 25% punitive tariffs imposed in August 2025 related to India's Russian oil purchases. Trump attributed this relaxation to India's pledge to cease direct or indirect imports of Russian oil and its commitment to purchasing US energy products. However, the US Supreme Court later overturned Trump's tariff decision.