Why the US says India can buy Russian oil again
Why the US Says India Can Buy Russian Oil Again
Just over a month following India’s commitment to halt Russian oil imports in return for a U.S. trade agreement, the White House has permitted Indian refiners to resume purchasing Russian crude. This development raises questions about the consistency of U.S. policy on the issue. The decision to ease sanctions on Russian oil sales to India aims to address potential supply disruptions, according to officials.
The Trump administration had previously pressured India to reduce its reliance on Russian oil. However, a significant policy shift emerged this week, with the U.S. Treasury announcing a 30-day waiver to allow Indian buyers to access Russian crude already in transit. “India is an essential partner of the United States, and we fully anticipate that New Delhi will increase U.S. oil purchases,” stated Treasury Secretary Scott Bessent, emphasizing the measure’s role in mitigating energy market pressures.
“The U.S. government is simply looking for quick fixes to the global oil price issue,” said Ben Hilgenstock, a sanctions expert at the Kyiv School of Economics. “The Russian oil that is already floating around is obviously a prime candidate for that.”
The waiver covers Russian crude and petroleum products loaded onto ships before March 5, as long as they reach Indian shores via Indian companies. This temporary relief is designed to ease supply and price strains caused by geopolitical tensions, particularly following U.S. and Israeli strikes on Iran. The Strait of Hormuz, a critical shipping route, has seen reduced oil flows, while production in the Middle East has been affected.
India, the world’s third-largest crude importer, faces challenges due to its limited crude reserves, which typically cover less than a month of demand. Refineries also hold small inventories of other petroleum products, making them susceptible to supply shocks. “It’s a saving grace for Indian refineries,” noted Carole Nakhle, CEO of Crystol Energy. “They weren’t purchasing Russian oil at zero levels, but the waiver helps them secure alternatives.”
India’s Strategic Shift
Before Russia’s 2022 invasion of Ukraine, India was not a major buyer of Moscow’s oil. But as Russian crude became more affordable, imports surged. This trend slowed earlier this year under pressure from the Trump administration. Hilgenstock explained that the decision to ease restrictions was influenced by low global oil prices at the time, allowing India to source cheaper alternatives.
Now, with Iran’s energy threats still looming, the U.S. is positioning itself to support India’s energy needs while keeping Russian gains minimal. “This short-term measure won’t significantly benefit the Kremlin, as it only applies to oil already stranded at sea,” Bessent added. The strategy seems to align with broader efforts to stabilize international markets amid ongoing uncertainties.
Russia has already directed more oil shipments toward India in anticipation of such a reprieve. With supply chains under stress, the waiver ensures Indian buyers can access available stock, potentially lowering prices and easing regional energy pressures. The move highlights the U.S. focus on immediate solutions over long-term commitments in the current volatile climate.
