US Grants India 30-Day Waiver To Purchase Russian Oil Amid Iran War

New Delhi: The United States has granted India a temporary 30-day waiver allowing it to purchase Russian crude oil, a move aimed at maintaining global energy supply stability amid disruptions caused by the ongoing conflict involving Iran in West Asia.

With the crisis in the Gulf severely hampering shipping routes that pass through the Strait of Hormuz, the United States on Thursday allowed a 30 day waiver for India to purchase Russian Oil to meet its energy requirements. India sources nearly 40 per cent of its oil imports from the region, with a significant portion transported through the strategically important Strait of Hormuz.

The waiver was issued by the US Treasury as tensions in the Middle East have sharply disrupted oil shipments, particularly through key maritime routes such as the Strait of Hormuz, a critical artery for global energy trade. The exemption will allow Indian refiners to buy Russian oil that is currently stranded at sea or already in transit, ensuring that global oil markets continue to function smoothly during the crisis.

US Treasury Secretary Scott Bessent said, "President Trump's energy agenda has resulted in oil and gas production reaching the highest levels ever recorded. 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. This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorizes transactions involving oil already stranded at sea. India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of U.S. oil. This stop-gap measure will alleviate pressure caused by Iran's attempt to take global energy hostage".

The decision comes at a time when the escalating Iran conflict has triggered fears of supply shortages and rising crude prices. The crisis has disrupted Middle Eastern exports and forced several countries, including India, to look for alternative sources of crude oil to meet domestic demand.

India, the world’s third-largest oil importer, depends heavily on overseas supplies for nearly 90 per cent of its crude oil needs. With disruptions affecting traditional suppliers in the Gulf region, Indian refiners have begun securing Russian cargoes to offset the potential shortfall.

Russian Oil In Demand

Reuters reported that traders are currently offering Russia’s Urals crude to Indian buyers at a premium of USD 4-USD 5 per barrel over Brent on a delivered basis, reflecting tight availability.

That marks a sharp shift from February, when similar cargoes were trading at a discount of about $13 per barrel, traders told Reuters. Before the conflict began on February 28, HPCL had purchased two cargoes at that discounted price.

“India refiners are back in the market ... nowadays more than prices, availability of molecules is the issue,” one trader involved in Russian oil sales to India told Reuters.

Major Indian refiners such as Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL), and Mangalore Refinery and Petrochemicals Ltd (MRPL) have already started negotiating for prompt deliveries of Russian crude for March and April shipments. Some companies have reportedly secured millions of barrels to cushion against supply shocks.

US-India Russian Oil Issue

India remains highly exposed to supply disruptions in the Middle East. Reuters reported that the country’s crude reserves cover only about 25 days of demand, while roughly 40% of its oil imports come from the region through the Strait of Hormuz.

Following Russia’s 2022 invasion of Ukraine, India became the largest buyer of Russian seaborne crude. However, Reuters reported that Indian refiners began reducing purchases in January after months of pressure from Washington aimed at limiting revenue flows to Moscow’s war effort.

Cutting Russian oil imports helped New Delhi avoid potential 25% U.S. tariffs and contributed to an interim trade agreement between the two countries, according to Reuters.

India's current position of stock is also seen to be comfortable, with stock being replenished every day. As per the sources, there is no shortage of LPG or LNG as well as crude oil, in the world.

Sources noted that India is in touch with other suppliers as well. Sources said India is closely monitoring developments in the region but is well-prepared to manage any potential supply-side challenges due to adequate inventory levels and diversified sourcing.

Prior to the Middle East crisis, India had been reducing purchases of Russian crude in recent months amid pressure from the United States and negotiations over broader trade arrangements. However, the escalating conflict and disruptions in regional energy flows have prompted a temporary shift in procurement strategy to safeguard the country’s energy security. 

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