The US has renewed temporary waivers that would allow the purchase of Russian oil already loaded onto tankers, despite Treasury Secretary Scott Bessent ruling out any such relief earlier this week. Being a key importer of Russian oil, India would be a major beneficiary of the move, securing its oil needs in the tumultuous energy market.
Washington had last month issued temporary waivers, allowing countries to buy Russian and Iranian oil at sea to stabilise the energy markets across the world, driven up by the US and Israel’s war with Iran. The 3-day waiver expired on April 11.
On Wednesday, the Treasury Secretary asserted that such waivers would not be extended. A change in heart followed two days later. The Treasury Department on Wednesday extended its pause on sanctions, allowing the delivery and sale of Russian oil already loaded onto vessels.
Read: US Grants Month-Long Sanctions Waiver On Purchases Of Russian Oil Amid Iran War
The so-called general license replaces the earlier waiver with a similar one, effectively pushing the deadline to May 16.
The US waiver for the purchase of Russian oil shows how the fallout of the Iran war has enabled Moscow to profit from its energy exports, from which it had been restrained over the Ukraine invasion.
What A Waiver Means For India
The US sanctions waiver on Russian oil ensures continuous oil flows in global markets amid the Iran war.
This addresses the immediate crude availability concerns for India. With a similar waiver for Iranian crude set to expire tomorrow, it adds a cushion for Indian refiners, allaying the fears of a shortage in the energy markets.
India imports about 90% of its crude requirements, relying heavily on Gulf suppliers. About 40% of its oil imports must cross the maritime chokepoint of the Strait of Hormuz, which had been at the centre of the US and Israel’s war with Iran, with many ships waiting for days to pass the strategic waterway.
Moreover, insurance challenges complicate oil shipping, with the insurers now reassessing the risks linked to movements in the Gulf region.
Read: US Waiver On India’s Russian Oil Purchase: What It Means For Economy
A waiver on Russian oil, therefore, could prove to be crucial and ease short-term supply pressures for India.
However, the fresh supplies may not come with the steep discounts that India had been familiar with in the past. Reports suggest that Russian crude prices have jumped since last week, reaching its highest level since 2013.
The discounted rates provided an added layer of financial benefit amid a surge in crude prices in global markets. While a sustained rise in oil prices could feed into domestic inflation, the access to Russian crude in recent years has helped India overcome such financial pressures.
3X Jump In March Imports
India’s crude imports from Russia have more than tripled to 5.3 billion euros last month, with the US waivers providing a much-needed cushion amid its war with Iran. The import volumes have also doubled for India, with an increase in oil prices driving up the import bill.
Read: Indian Refiners Settle Iran Oil Deals In Yuan? Centre Says ‘Nothing Wrong’
India had been in a buying binge in March after a drop in purchases of Russian oil in February, European think tank Centre for Research on Energy and Clean Air has noted. The biggest shift was in the purchases by the state-owned refiners, which saw a 148% month-on-month rise, it added.
In March, India was second-largest importer (38%) of Russian oil after China (51%), compared to being third after China and Turkey in February.
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