India has been purchasing Russian oil irrespective of the US sanctions waivers and will continue to do so based on commercial viability and energy security requirements, a senior official said on Monday.
The move confirms that New Delhi won’t sharply alter its crude sourcing strategy despite the expiry of a temporary US waiver and continuing geopolitical tensions in West Asia.
The government’s stance comes at a time when disruptions around the Strait of Hormuz, elevated crude prices, surging freight costs and mounting under-recoveries at state-run oil marketing companies (OMCs) are increasing pressure on India’s energy import bill and fuel supply management.
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“Regarding the American waiver on Russia, I would like to emphasise that we have been purchasing from Russia earlier… before the waiver also, during the waiver also, and now also,” Sujata Sharma, Joint Secretary in the petroleum ministry, said on Monday.
“It is basically the commercial sense that should be there for OMCs to purchase. There is no shortage of crude. Enough crude has been tied up. Waiver or not, it should not affect our supplies,” she said.
The temporary US sanctions waiver allowing purchase and delivery of Russian seaborne crude expired on May 16. The waiver, first issued in March and later extended in April, had allowed countries including India to purchase oil linked to sanctioned Russian entities amid the supply disruption triggered by the US-Israeli conflict with Iran.
India imports nearly 88% of its crude oil requirement, making energy security and supply diversification critical amid the ongoing conflict in West Asia.
Russian crude has emerged as the largest component of India’s import basket since 2022 after Western sanctions disrupted Moscow’s traditional European export markets.
According to Kpler data, Russian crude imports into India are expected to average close to 1.9 million barrels per day in May, remaining near record levels despite tighter sanctions scrutiny.
Even after sanctions on Russian entities, vessels and financial channels, Russian oil itself remained outside direct sanctions, allowing Indian refiners to continue procurement through compliant shipping, insurance and payment channels.
Nikhil Dubey, Senior Research Analyst, Refining & Modeling at Kpler, said India was unlikely to significantly reduce Russian crude imports in the near term.
“India’s Russian crude oil imports are likely to scale down modestly below March levels. However, given the limited availability of alternative crude supplies globally due to the Strait of Hormuz disruption, any significant reduction in Russian oil flows to India is unlikely,” Dubey said.
India is also increasing crude purchases from the US, Venezuela, Oman, Brazil and Angola as part of efforts to diversify sourcing amid supply disruptions from the Middle East.
The continuing crude price shock has also kept pressure on state-run OMCs despite the recent ₹3-per-litre increase in petrol and diesel prices. According to the oil ministry, the hike has reduced daily under-recoveries to around ₹750 crore from nearly ₹1,000 crore earlier, though retail fuel prices remain below cost-recovery levels due to elevated crude prices and rupee weakness.
“At their peak, oil marketing companies were absorbing losses of ₹23-30 per litre on petrol and diesel,” said Sehul Bhatt, Director, Crisil Intelligence.
He said cumulative losses across petrol, diesel and LPG are expected to cross ₹1 lakh crore by end-May despite the latest fuel price revision.
Freight costs have also surged sharply due to the conflict.
According to Mukesh Mangal, Additional Secretary in the Ministry of Ports, Shipping and Waterways, LPG freight rates from West Asia have risen to $207 per metric tonne from $94 before the conflict.
VLCC crude freight rates have increased from $14 per metric tonne to $29.64 per metric tonne, while container freight rates have jumped to $2,000 per container from $203 earlier.