New Delhi, Mar 6 (PTI) — Indian refiners have started buying some of the more than 15 million barrels of Russian crude currently floating on tankers near the country to offset supply concerns stemming from supply disruptions in the Middle East.
Sources said refiners stepped up purchases after the US Treasury issued a 30-day license allowing India to buy Russian oil cargoes currently stranded at sea.
India, which has been among the biggest buyers of Russian oil, cut purchases after the US pressured New Delhi to avoid buying Russian barrels in an effort to limit money flowing to Moscow’s war effort in Ukraine.
Russian oil imports to India fell to 1.04 million barrels per day in February – the least since November 2022. The US cut tariffs on Indian goods conditional on New Delhi reducing its purchases of Russian oil.
That left several shiploads of Russian oil stranded on the high seas, the sources said.
India, which decided to buy discounted Russian oil in February 2022 after Western sanctions, is now adjusting its purchases due to the disruption of supplies to the Middle East.
The country previously imported record volumes of Russian crude when the cargo was available at deep discounts, helping refiners offset rising global oil prices. Russian costs peaked at 2.15 million barrels in May 2023.
However, with the widening West Asian conflict blocking supplies through the Strait of Hormuz and raising concerns about oil and LNG supplies from the Middle East, Indian refiners are now balancing purchases from both Russian offshore cargo and other sources to ensure uninterrupted domestic fuel supplies.
“President Trump’s energy agenda has resulted in oil and gas production reaching the highest levels on record,” said US Treasury Secretary Scott Bessent. “To keep oil flowing to the global market, the finance ministry is issuing a temporary 30-day exemption to allow Indian refiners to buy Russian crude.”
He called the move a temporary measure and said Washington expected India to eventually buy more US oil.
“India is a vital partner of the United States and we fully expect Delhi to increase purchases of US oil. This temporary measure will ease the pressure caused by Iran’s attempt to take global energy hostage,” Bessent said in a post on X.
The short-term measure will not bring significant financial benefits to the Russian government because it only allows transactions involving oil already stranded at sea, he added.
India, which has 25 days of oil reserves (the raw material for making fuels like petrol and diesel), gets 40-50 percent of its oil needs from the Middle East through the Strait of Hormuz. Escalating conflict in West Asia effectively closed the strait.
Sources said Indian refiners are now buying Russian crude to build up stocks.
There are more than a dozen tankers carrying Russian oil in the Arabian Sea and Bay of Bengal, the sources said, adding that another eight vessels are idling off Singapore and could reach India within days. Besides, ships loaded with Russian oil are also in the Mediterranean Sea and in the Suez Canal, which would also reach India in less than a month.
“With nearly 50 percent of India’s oil imports passing through the Strait of Hormuz, the country remains highly exposed to potential supply disruptions,” said Sumit Ritolia, an analyst at Kpler. “A US waiver allowing additional purchases of Russian oil above the base load offers short-term relief, although competition from Chinese buyers for the same barrels could limit the scope of benefits for India.”
Indian refiners have already been importing around 1 million barrels of Russian crude per day in recent months, meaning the exemption effectively acts as a green signal to increase volumes above this base load, he said.
“As of early March, around 130 million barrels of Russian oil remains afloat, including significant volumes via the Indian Ocean, the Red Sea/Suez route and around Singapore, which could potentially be diverted to Indian ports if trade deals are finalised.
“With the exemption now in place, refiners could quickly resume purchases, which could push out Russian inflows of around 1.6 to 2 million barrels per day in the near term,” he said.
While this provides a short-term logistical buffer, it cannot fully offset India’s 2.6 million bpd exposure to Middle Eastern crude, and competition from Chinese buyers for the same Russian barrels will limit growth.
“For Indian refiners, renewed access to Russian oil would support feedstock security and margins. However, the Indian government has not officially indicated curbs on product exports. In the near term, refiners are likely to prioritize domestic fuel availability and comfortable inventory levels, which means that increased oil availability may not immediately translate into higher product exports. Export flows would likely increase as domestic requirements are met,” he said.
Disclaimer: This story was published from the agency’s news feed without editing the text.
