Indian refiners have begun purchasing Russian crude cargoes currently at sea after the United States issued a 30-day waiver allowing India to procure Russian oil loaded on vessels as of March 5, providing refiners temporary flexibility to access supplies already in transit.
“After the US announced the waiver, refiners are purchasing both sanctioned and non-sanctioned Russian oil that is currently on water,” a senior official aware of the development said on condition of anonymity.
Navigating Sanctions
The waiver, issued by the US Treasury Department’s Office of Foreign Assets Control (OFAC), allows Indian companies to receive Russian crude cargoes that had already been loaded on vessels on or before March 5 and are destined for Indian ports. The exemption will remain valid until April 4, 2026.
Officials said the relaxation enables refiners to purchase cargoes from all Russian sources provided the oil was loaded before the specified deadline. “The latest waiver allows refiners to purchase oil from all Russian sources which were loaded on vessels till the specified time of March 5 as per the OFAC order. So all oil on sea that’s on offer they are trying to procure,” the official said.
Russia has remained India’s largest crude supplier since 2022, after Western sanctions on Moscow pushed discounted Russian oil toward Asian markets. However, shipments to India had declined in recent months after sanctions were imposed on Rosneft and Lukoil, two of Russia’s largest oil producers, in November.
The development comes at a time when global energy markets remain volatile following the escalation of tensions in West Asia, which has disrupted shipping routes and heightened concerns over supplies moving through the Strait of Hormuz, one of the world’s most critical oil transit chokepoints.
Government sources, however, gave a positive update on cargo movements, indicating that shipping activity near the Strait of Hormuz may resume soon after Iran pledged not to target neighbouring countries unless attacked from their territory.
Strategic Diversification
Officials said India has already taken steps to reduce supply risks by diversifying crude sourcing routes. “India has ramped up about 10 per cent of its crude imports from sources other than the Strait of Hormuz,” a government source said.
As a result, the share of crude imports sourced outside the strait has increased from around 60 per cent to nearly 70 per cent, helping ensure a steady flow of supplies despite disruptions in the region.
Officials also ruled out any immediate increase in petrol and diesel retail prices, saying domestic fuel stocks remain comfortable.
According to tanker-tracking data from Kpler, Russia supplied about 1.04 million barrels per day (bpd) of crude to India in February, followed by Saudi Arabia at around 1 million bpd and Iraq at 980,000 bpd, underlining Moscow’s continued dominance in India’s crude import basket.
Meanwhile, India is also expanding its sourcing of other fuels. Amid tight supply conditions, the country plans to increase imports of liquefied petroleum gas (LPG) from the United States, where state-run oil marketing companies began sourcing the cooking fuel earlier this year.
The move gains significance as domestic LPG prices were recently raised by ₹60 per cylinder, while commercial cylinders saw an increase of ₹114, amid concerns over supply disruptions.
Officials added that India is also examining the international energy portfolios of companies such as TotalEnergies and ExxonMobil to secure additional supplies of liquefied natural gas (LNG) and LPG, as New Delhi looks to strengthen energy security during a period of heightened geopolitical uncertainty.