New Delhi: Indian refiners are now buying more than 15 million barrels of Russian crude from tankers near India in an effort to deal with supply worries arising from disruptions in the Middle East.
The move comes after the US treasury department gave a 30-day licence allowing India to purchase Russian oil cargoes stuck at sea.
Sources say refiners increased purchases right after the US clearance. India had cut back on Russian oil due to US pressure in the latter’s effort to limit money going to Russia’s war in Ukraine.
In February, India’s Russian crude imports fell to 1.04 million barrels per day. This was the lowest level since November 2022. The US had linked lower tariffs on Indian goods to these cuts.
This resulted in several Russian oil shipments getting stuck on the high seas, sources noted.
India
started purchasing cheap Russian crude in February 2022 following Western sanctions on Moscow. Imports hit a record 2.15 million barrels per day in May 2023. This helped Indian refiners at a time when global oil prices rose sharply.
Now, with fighting in West Asia blocking the Strait of Hormuz, oil and LNG supplies from the Middle East face risks. Indian refiners are mixing Russian sea cargoes with other sources to keep fuel flowing at home.
“President Trump’s energy agenda has resulted in oil and gas production reaching the highest levels ever recorded. US Treasury Secretary Scott 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.”
Calling it a short-term measure, he said Washington expected India to purchase more US oil later. “India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of US oil. This stop-gap measure will ease pressure caused by Iran’s attempt to take global energy hostage,” Bessent posted on X.
The waiver only covers oil already at sea. This means little extra money for the Russian government, he pointed out.