India Secures Temporary Waiver to Purchase Stranded Russian Oil

Temporary Permission Granted for Russian Oil Purchases

The United States has provided India with a temporary waiver allowing the purchase of Russian oil that is currently stranded at sea. This short-term measure aims to stabilize global oil supplies amid the escalating crisis in West Asia. US Treasury Secretary Scott Bessent noted that this decision was made to alleviate immediate supply pressures in the global market, commending India for its previous compliance with US requests to halt purchases of sanctioned Russian crude.

In an interview with Fox Business, Bessent explained that the US had previously urged India to cease buying Russian oil, a request that New Delhi adhered to while planning to boost imports from the US. However, due to recent disruptions in energy flows, the US has now permitted India to acquire Russian crude that is already loaded on tankers. Bessent mentioned that there are hundreds of millions of barrels of sanctioned crude stranded at sea, and allowing some of this oil into the market could help alleviate global supply constraints.

The waiver, issued by the US Treasury, permits the delivery and sale of Russian crude and petroleum products to India for a duration of 30 days. Officials emphasized that this action is a temporary measure and does not indicate a broader change in Washington’s sanctions policy towards Russia. US Energy Secretary Chris Wright confirmed the decision, stating that it aims to quickly introduce existing oil supplies into the market and prevent a surge in global prices.

Wright further explained to ABC News that the waiver would enable India to refine the oil already stored on tankers, thereby releasing additional supply into the global market and reducing competition for other refineries. He reiterated that this is a short-term measure to help maintain lower oil prices, while the overall policy towards Russia remains unchanged.

Waiver Linked to Tensions in the Strait of Hormuz

This decision comes amid rising tensions in the Strait of Hormuz, a vital global shipping route, where ongoing conflicts in West Asia have raised concerns about potential disruptions to oil shipments. Bessent indicated that this temporary measure is intended to ensure the continuous flow of oil into global markets during the crisis while limiting financial benefits for Moscow, as the waiver only applies to crude that is already in transit.

Bessent also highlighted India's importance as a US partner, expressing expectations that New Delhi will gradually increase its imports of American energy.

Current Oil Supply Situation in India

India currently imports approximately 5.5 to 5.6 million barrels of crude oil daily, fulfilling nearly 90% of its domestic demand through imports. Officials have stated that the country's energy supplies remain stable despite geopolitical tensions. Currently, around 15 million barrels of crude are on tankers in the Arabian Sea and the Bay of Bengal, with an additional seven million barrels waiting near Singapore. Data from Kpler indicates that India imported just over 1 million barrels per day of Russian crude in February, a slight decrease from 1.1 million bpd in January and 1.2 million bpd in December. Prior to the Russia-Ukraine conflict in 2022, Russian crude constituted only 0.2% of India's imports, but purchases surged after Moscow began offering substantial discounts on its oil.