Amid rising geopolitical tensions and uncertainty in global energy markets, the United States has granted India a temporary waiver to purchase Russian oil that was already loaded onto ships. The move comes as global supply concerns intensify and India seeks to secure stable crude supplies.
Amid worries about the world’s supply, US Treasury Secretary Scott Bessent announced on Friday that Washington will grant Indian refiners a 30-day waiver to buy Russian oil that was stuck at sea.
US Grants 30-Day Waiver for India to Buy Russian Oil
New Delhi: Two people familiar with the situation informed Mint that Indian refiners have been purchasing both sanctioned and non-sanctioned Russian oil at sea since the US approved a 30-day waiver on March 5 for India to purchase Russian oil loaded aboard ships.
Since 2022, Russia has been India’s main oil supplier. The US Department of Treasury’s most recent waiver for India permits refiners to buy oil from all Russian sources that were loaded on vessels until the specified time of March 5, according to the OFAC (Office of Foreign Assets Control) notification.
Impact of Sanctions on Russian Oil Supply
However, supplies have decreased since sanctions against Rosneft and LUKOIL, two of Russia’s biggest oil producers, were imposed in December. According to officials, they are attempting to acquire all of the available oil on the sea.
Amid worries about the world’s supply, US Treasury Secretary Scott Bessent announced on Friday that Washington will grant Indian refiners a 30-day waiver to buy Russian oil that was stuck at sea.
OFAC Notification and Waiver Details
The exemption applies to Russian-origin crude oil loaded on vessels on or before 12.01 AM Eastern Standard Time (10.31 AM IST) on March 5, 2026, according to a notification from the OFAC, a division of the US Department of Treasury.
Due to supply problems near the Strait of Hormuz and growing tensions in West Asia, energy markets are still unstable. Bessent claimed on X that the temporary solution will ease the pressure brought on by Iran’s ambition to seize control of the world’s energy supply. He described India as a vital US ally and stated that the US anticipates New Delhi increasing its purchases of US oil.
🛢️ US Waiver for Russian Oil – Key Details
- Waiver Duration: 30 days starting March 5, 2026
- Eligible Oil: Russian crude loaded on ships before deadline
- Allowed Buyers: Indian refiners
- Authority: US Treasury’s OFAC notification
- Goal: Stabilize global oil supply and prevent shortages
- Geopolitical Context: Rising tensions in West Asia and supply disruptions
📊 India’s Oil Import & Energy Situation
- Top Oil Supplier: Russia since 2022
- February Imports: 1.04 million barrels per day from Russia
- Second Supplier: Saudi Arabia with 1 million bpd
- Third Supplier: Iraq with 980,000 bpd
- India’s Refining Capacity: Nearly 268 million metric tons annually
- Import Cost Impact: $1 increase per barrel raises India’s bill by ₹16,000 crore
India Increasing Russian Oil Purchases
As fresh oil supplies from West Asia decreased, Mint previously predicted that Indian refiners would probably purchase more oil from Russia. Supplies from non-sanctioned organizations continued to arrive, even if imports from Russia decreased after the sanctions and the unveiling of India’s framework for an interim trade agreement with the US.
After being sold at a discount since the start of the conflict in Ukraine in 2022, Russian oil, which is already in high demand, is now being offered at a premium to the benchmark Brent crude. The Intercontinental Exchange’s April Brent contract ended the day at $92.69 per barrel, up 8.52% from its closing price.
India Looks for Alternative Oil Sources
With the Strait of Hormuz blockade cutting off around half of its supplies from West Asia, India is likewise looking for alternative oil sources. With an annual capacity of almost 268 million metric tons, the nation is the fourth-largest refiner in the world. An annual increase of $1 per barrel causes India’s import bill to climb by almost ₹16,000 crore.
According to data from international ship tracking company Kpler, India received an average of 1.04 million barrels of oil per day (bpd) from Russia in February, with Saudi Arabia coming in second with 1 million bpd and Iraq with 980,000.
LPG Supply Situation and Import Dependency
The storage situation for oil, LNG, and LPG is “comfortable” thus far, according to another official, and the supply of crude from places other than West Asia has increased.
In January, Indian oil marketing companies started receiving their first significant contracted volumes of LPG from the US under a new long-term agreement that is anticipated to cover about 10% of the country’s total LPG imports. This supply chain pivot is an attempt to address the current LPG shortage.
India Raises Domestic LPG Prices
In light of the West Asia crisis and supply shortfall, state-run oil marketing businesses raised the price of home cooking gas by ₹60 per cylinder on Saturday, making the development noteworthy. According to the Indian Oil Corporation (IOC) website, the price of non-subsidized LPG in Delhi has increased from ₹853 to ₹913 per 14.2-kg cylinder, the second increase in less than a year.
After deducting the ₹300 per cylinder subsidy that more than 100 million Pradhan Mantri Ujjwala Yojana recipients receive for up to 12 refills annually, the price per 14.2-kg cylinder will be ₹613.
Global LPG Price Impact on India
“Because India is a net importer of LPG, domestic prices are tied to international benchmarks like the Saudi Contract Price (CP),” stated a third official who also wished to remain unnamed. International LPG prices have increased significantly over the last many years. The Saudi CP, for example, increased from $415 per metric tonne in 2020–2021 to $712 per metric in 2022–2023.
However, the government made sure that consumers did not bear the entire brunt of these hikes. The hike would amount to 80 paise a day for a family of four, or 20 paise per person per day, if the average household consumed four to five cylinders annually, the official continued.
Government Measures to Boost LPG Supply
The government has previously ordered all state-run and private-sector refineries in the nation to increase domestic cooking gas output by rerouting feedstock away from the manufacture of non-essential goods, such as petrochemicals, amid a worldwide shortage of LPG supply.
The ministry has instructed all refiners to supply LPG to the three state-owned refiners, Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd, using its authority under the Essential Commodities Act, 1955. These refiners would then solely offer LPG to home cooking gas consumers.
India’s LPG Demand and Import Dependency
Given that India only has roughly 25 days’ worth of LPG supplies, the move is noteworthy. Approximately 75–80% of the 33.15 million tons of annual demand are met by imports. Propane and butane, byproducts of the production of natural gas and crude oil, are used to make LPG.
India is one of the biggest importers of LPG in the world and is mostly dependent on supplies from West Asia, primarily from Saudi Arabia, Qatar, and the United Arab Emirates. The present disruption in the region may limit the country’s access to these supplies. In FY25, India imported $12.47 billion worth of LPG. By January, FY26 imports had already reached $11.25 billion. during FY25. In FY25, the nation produced 12.8 million tons of LPG.
Frequently Asked Questions
1. For what reason did the US give India permission to purchase Russian oil?
Indian refiners were given a 30-day waiver by the US to buy Russian crude oil that had already been put onto ships prior to March 5, 2026. In the face of escalating geopolitical tensions, the decision seeks to stabilize energy markets and avoid interruptions to the world’s oil supply.
2. Does the waiver allow Indian refiners to purchase sanctioned Russian oil?
Indeed. Indian refiners are permitted to buy both sanctioned and non-sanctioned Russian crude under the interim exemption granted by the US Treasury’s Office of Foreign Assets Control (OFAC), provided that the oil was loaded aboard vessels before to the deadline.
3. What is Russian oil crucial for India?
Due to its competitive oil prices, Russia has emerged as India’s top supplier of crude oil since 2022. To meet the nation’s high energy demand and lower import costs, Indian refiners rely on Russian crude.
4. What impact is the West Asia problem having on India’s energy supply?
Global energy markets are now unstable due to escalating tensions in West Asia and disturbances in the Strait of Hormuz. Due to these problems, India has had to look into other oil sources and boost imports from the US and Russia.
5. What caused the recent rise in LPG prices in India?
The primary causes of the ₹60 increase in domestic LPG pricing per cylinder were supply interruptions and rising fuel prices abroad. India imports between 75 and 80 percent of its LPG, thus changes in international pricing have an immediate effect on the cost of cooking gas there.
Conclusion
In light of the uncertainty surrounding the world’s energy markets, India is temporarily relieved by the US decision to temporarily waive Russian oil purchases. India continues to diversify its energy sources while guaranteeing domestic fuel availability in the face of supply disruptions in West Asia and escalating geopolitical tensions.
However, India’s energy expenses may continue to be under pressure in the upcoming months due to growing global prices and a significant reliance on imports.
Disclaimer: This article is for informational and news reporting purposes only. Energy market data, government decisions, and geopolitical developments may change over time.
