US ‘allows’ India 30-day waiver to buy Russian oil amid global supply concerns

India has been 'allowwed' a temporary reprieve in securing energy supplies after the United States granted a 30-day waiver allowing Indian refiners to purchase Russian crude oil that is already in transit.

The US Treasury Department’s Office of Foreign Assets Control (OFAC) issued a licence authorising the delivery and sale of crude oil and petroleum products of Russian origin loaded on vessels as of 5 March 2026 to India. The authorisation will remain valid until the end of 3 April 2026.

The move comes as Washington seeks to stabilise global energy markets at a time of heightened tensions in the Middle East, where disruptions to major oil facilities and the closure of a key shipping route have pushed up crude prices.

US Treasury Secretary Scott Bessent described the waiver as a short-term measure aimed at ensuring the smooth flow of oil into global markets while limiting financial gains for Moscow.

In a statement posted on social media platform X, Bessent said, "To enable oil to keep flowing into the global market, the Treasury Department is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil."

Bessent said the licence would apply only to cargoes that were already stranded at sea, meaning it would not significantly benefit the Russian government. He added that India remains an “essential partner” for the United States and expressed confidence that New Delhi would eventually increase its purchases of American energy supplies.

The waiver follows months of pressure from Washington on India to scale back imports of Russian crude in response to Moscow’s invasion of Ukraine. Sanctions imposed by the administration of US President Donald Trump last November targeted major Russian oil companies, including Lukoil and Rosneft.

As a result, India’s imports of Russian crude dropped to around 1.1 million barrels per day in January, the lowest level since November 2022, reducing Russia’s share of India’s overall oil imports to about 21.2 per cent. Industry data suggests that the figure rebounded to roughly 30 per cent in February.

The latest policy shift comes against the backdrop of rising instability in the Middle East. Oil production in several parts of the region has been disrupted by strikes on major energy facilities, including Saudi Aramco’s Ras Tanura refinery and Iraq’s Rumaila oil field.

At the same time, Iran’s blockade of the Strait of Hormuz, a critical maritime corridor through which about one-fifth of the world’s oil supply passes, has compounded concerns about global supply shortages.

India is particularly vulnerable to such disruptions, as roughly 40 per cent of its crude oil imports come from the Middle East through the Strait of Hormuz. The country’s strategic and commercial reserves currently cover only about 25 days of demand.

According to sources cited by Reuters, New Delhi approached the US administration seeking permission to purchase Russian cargoes amid concerns that the conflict involving Iran could further tighten global supplies.

Indian state-owned refiners, including Indian Oil Corporation, Bharat Petroleum, Hindustan Petroleum and Mangalore Refinery and Petrochemicals Limited, have reportedly begun negotiating with traders for prompt deliveries of Russian crude.

Sources said that refiners have already purchased about 20 million barrels under the waiver arrangement.

Market conditions have also shifted sharply. Russian Urals crude, which was previously offered at a discount of about $13 per barrel in February, is now trading at a premium of roughly $4 to $5 above Brent crude for deliveries scheduled in March and early April.

Some refiners have also started tapping Russian oil stored on vessels near India’s coastline to compensate for reduced shipments from the Middle East.

Meanwhile, escalating geopolitical tensions have driven oil prices higher. Brent crude rose to about $83.07 per barrel on Friday morning. Despite the increase in global prices, industry sources indicated that there are currently no plans to raise petrol or diesel prices in India.

Cargoes purchased under the temporary waiver are expected to reach Indian ports over the course of March and early April.

With IANS inputs