The United States has given India a temporary 30-day waiver that allows Russian oil cargoes stranded at sea to be sold to Indian buyers. Two senior US officials confirmed the decision to Reuters. The step comes at a time when tensions in the Persian Gulf are rising and threatening supplies from one of the world’s most important oil-producing regions, the Strait of Hormuz
Washington approved the waiver despite Russian energy exports remaining under sanctions. Officials said the step is meant to keep oil flowing in the global market instead of leaving the cargoes stranded at sea.
US allows limited Russian oil shipments to India
US Treasury Secretary Scott Bessent confirmed the decision and said the waiver is meant to ensure global oil supply is not disrupted. “To enable oil to keep flowing into the global market, the US is issuing a 30-day waiver to allow Indian refiners to purchase Russian oil,” Bessent said.
The permission covers deals involving Russian crude oil and petroleum products that were loaded onto ships before March 5. These shipments can go ahead as long as the oil is delivered to India and bought by an Indian company. The rule applies only to cargo that had already been loaded before the deadline.
However, according to Bloomberg, the permission will not last forever. The license is valid only for a short period and will expire on April 4 at 12:01 am Washington time. After that point, the transactions covered under this special approval will no longer be allowed unless new guidance is issued.
Bessent added that the measure is limited and will apply only to cargoes that are already at sea. According to him, the decision will not bring major financial gains to the Russian government. “This short-term measure will not provide significant financial benefit to the Russian government as it only authorises transactions involving oil already stranded at sea,” Bessent said.
Bessent also said Washington expects India to increase purchases of American crude in the future. “We fully anticipate that New Delhi will ramp up purchases of US oil,” he added.
India worried about supply disruptions
The waiver comes at a time when India is facing concerns about possible disruption in Middle Eastern energy supplies. According to Reuters, India’s crude reserves can cover only about 25 days of demand. Around 40 percent of the country’s oil imports come from the Middle East, and much of that supply passes through the strategically important Strait of Hormuz.
Any disruption in that route could instantly affect India’s energy security. India had earlier become the biggest buyer of Russian seaborne crude after Moscow invaded Ukraine in 2022.
However, earlier this year New Delhi began reducing its purchases under pressure from Washington, which has been trying to cut Russia’s oil revenue linked to the war in Ukraine. Cutting back on Russian imports also helped India avoid potential 25 percent tariffs and helped secure an interim trade agreement with the United States.
Indian refiners move to secure cargoes
State-run refiners such as Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Mangalore Refinery and Petrochemicals Limited have already started discussions with traders to buy Russian crude for quick delivery, Reuters reported. One source said Indian state refiners have already bought around 20 million barrels of Russian oil from traders.
Traders said Russian Urals crude is now being offered to Indian buyers at a premium of about $4 to $5 per barrel above Brent for cargoes arriving in March and early April. According to traders, the focus for Indian refiners has shifted from price to availability. “India refiners are back in the market nowadays more than prices, availability of molecules is the issue,” a trader involved in Russian oil sales to India told Reuters.
According to the same source, Reliance Industries has also approached traders to secure quick Russian oil shipments.