Is India Still Exposed To Supply Disruptions After US Waiver On Russian Oil?

Israel-US-Iran War: While the United States has granted India a temporary 30-day waiver to allow Indian refiners to purchase Russian oil, energy intelligence firm Kpler argues that the South Asian nation still remains highly exposed to potential supply disruptions.

"The US waiver allowing additional purchases of Russian crude over baseload offers short-term relief, though competition from Chinese buyers for the same barrels could limit the extent of India’s benefit," according to Kpler.

The Russian oil purchases linked US waiver is being considered a top-gap measure that will alleviate pressure caused by Iran’s attempt to take global energy hostage.

The move appears designed to maintain continuity in global oil flows at a time when geopolitical tensions and supply uncertainties in the Middle East remain elevated.

Notably, India had continued its Russian oil purchases ahead of this waiver, with baseline flows estimated at around 1000 thousand barrels per day (kbd) in recent months.

Ahead of December last year, Russia was a dominant supplier to India's crude demand, accounting for roughly 30-40% of total imports, with flows typically ranging between 1.5–2.0 Mbd.

Also Read: ndia May Become ‘Reverse AI Trade’ as Global AI Rally Peaks: Chris Wood

Tariffs and sanctions tightening on Russian crude last year led Indian refiners to recalibrate their crude imports and reduce intake of Russian barrels. With the waiver now in place, refiners could quickly resume purchases, potentially pushing Russian inflows around 1.8 to 2 Mbd in the near term.

While this provides a short-term logistical buffer, it cannot fully offset India’s ~2.6 Mbd exposure to Middle Eastern crude, and competition from Chinese buyers for the same Russian barrels will limit the upside, it noted. 

A portion of the recovery could materialise relatively quickly as a significant volume of Russian crude is already positioned across key shipping corridors.

"As of 6 March, roughly 130 million barrels of Russian crude remain on the water, including around 27 million barrels in the Arabian Sea/Indian Ocean region, about 20 million barrels near the Red Sea and Suez Canal routes, and roughly 7.5 million barrels around Singapore," as per Kpler.