US extends sanctions waiver on Russian oil again – how will this impact India? –

The United States has decided to extend an exemption from sanctions on Russian oil, providing temporary relief to countries that buy crude from Moscow at a time when the world faces tight energy supplies.

On Friday, the US Treasury Department issued a new license allowing the purchase of Russian oil and petroleum products that had already been loaded on ships as of that day. This arrangement will remain in place until 12:01 a.m. (0401 GMT) on May 16, replacing the previous waiver that expired on April 11. The move comes despite Treasury Secretary Scott Besent’s recent indication that this easing will not continue.

“We will not renew the general license for Russian oil,” he said, adding: “This oil was present in the waters before March 11, so everything that was there was used.”

Now, with the sanctions waiver remaining in effect, countries will be able to buy crude oil from Russia for a longer period as supply concerns continue to weigh on energy security.

What is the waiver of sanctions on Russian crude for India?

For India, which relies on imports to meet nearly 90% of its crude oil needs, the exemption carries immediate significance. In recent weeks, with Middle East supplies under pressure, Indian refiners have increased their consumption of Russian crude. Earlier, purchases slowed after US sanctions targeted major Russian producers such as Rosneft and Lukoil, but the changing supply landscape has put the focus back on Russian oil.

Earlier, Vandana Hari, founder of Singapore-based consultancy Vanda Insights, told Bloomberg: “India is grabbing all the Russian crude it can get.” “I expect India to continue to maximize Russian imports as long as its flows from the Persian Gulf remain crimped.” She added.Meanwhile, India has consistently stressed that it does not rule out buying Russian crude. Government officials also said that India’s approach remains guided by practical considerations. “Our priority is to provide the necessary energy to meet domestic demand,” Sujata Sharma, Joint Secretary in the Ministry of Oil, said earlier. She said the decision was “driven by the technical commercial viability of crude oil and the commercial sense it provides to our refineries.”Import trends highlight this shift. According to Kpler data, India’s purchases of Russian crude reached 1.98 million barrels per day in March, the highest level since June 2023. Although imports have declined to 1.57 million barrels per day so far in April, this decline has been linked to maintenance work at the 400,000 barrels per day Nayara Energy Refinery. Industry executives expect volumes to rise again from next month.The initial exemption introduced in March has already enabled significant flows, with India managing to secure around 60 million barrels for delivery this month. Meanwhile, Russia’s offshore crude backlog, estimated at around 155 million barrels in early January, has begun to decline as Indian buyers increase their purchases.

Current quantities are estimated at about 100 million barrels.For India, the extension provides a narrow but important window to secure supplies, even as broader uncertainties over the Middle East and global energy flows continue to shape its import strategy.

The extension comes as the conflict in the Middle East has extended for nearly seven weeks. The war began on February 28, when the United States and Israel launched joint strikes on Iran, after which Iran tightened its noose on the Strait of Hormuz, straining global oil supplies.