Indian refiners have reportedly bought up millions of barrels of Russian oil that was stranded at sea after the Donald Trump administration agreed last week to grant New Delhi a 30-day waiver from sanctions for cargoes loaded on vessels as of March 5.
Among the top buyers was India’s largest private refiner Reliance Industries which bought at least 6 million barrels of Russian oil for March delivery, Reuters reported citing industry sources with knowledge of the matter.
The purchases come as the US-Israel led war on Iran has rocked global crude prices, with Tehran virtually halting activity in the strategically vital Strait of Hormuz.
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India, the world’s third-biggest oil importer, imports about 40% of its oil from the Middle East through the Strait, Reuters noted in its report.
In the past two months, supplies from the Middle East accounted for the highest share in India’s oil import mix after its refiners slashed their purchases of Russian oil due to pressure from Washington.
Reliance was among India’s biggest buyers of discounted Russian oil since Moscow began its invasion of Ukraine. But Trump’s threats of sanctions against those purchases, and a 25% levy on broader Indian exports, forced refiners to cut back those purchases.
In January, Russian oil accounted for the smallest share in India’s overall mix since late 2022. In its place, New Delhi turned to the Middle East to meet its oil demand.
Fuel panic
Aside from oil, India is also worried about its natural and cooking gas supplies.
The world’s most populous nation is the fourth largest liquefied natural gas (LNG) buyer, and second-largest buyer of liquefied petroleum gas (LPG), such as that used for cooking – much of which is sourced from the Middle East.
On Tuesday it ordered tighter controls on the distribution of largest liquefied natural gas (LNG), requiring supplies to be prioritised for households, transport sectors and the production of LPG.
That would mean other sectors, including fertiliser plants, tea industries, ceramics and tile firms and restaurants and hotels would need to brace for uncertainty and potential disruptions.
Concern around fuel supples is not limited to India, meanwhile.
At least a fifth of global oil supplies usually pass through the Strait of Hormuz waterway and crude price rises have caused panic among importers across the world, including Asia.
South Korea has ordered the activation of a $68 billion market stabilisation fund while Japan is reportedly considering drawing on national oil reserves.
Queues at petrol stations have been seen as far as Vietnam, Myanmar, Kathmandu and the Philippines.
Oil-poor Philippines is to shift to a four-day work week starting this week, while Vietnam’s trade ministry called on local businesses on Tuesday to encourage their employees to work from home.
War trumps sanctions
The fuel panic means that Washington’s changing attitude on Russian oil is not limited to Indian purchases.
On Monday, Trump told reporters that he will waive some sanctions on oil to boost supply and bring down prices that have upended the world’s energy and transport sectors.
“We’re… waiving certain oil-related sanctions to reduce prices,” Trump told reporters after talks with Russian President Vladimir Putin.
He also mentioned Chinese President Xi Jinping.
“We have sanctions on some countries. We’re going to take those sanctions off till this straightens out ,” Trump said. He did not specify any country or provide details on which sanctions would be lifted.
His comments came after speaking to the leader of Russia, one of the world’s largest oil producers and exporters, while China is a key Russian trading partner and major oil importer.
Oil prices tanked and equities rallied on Tuesday following a wild day of swings that came after Trump said the US-Israel war on Iran would be ending earlier than thought.
He said Washington could possibly keep sanctions lifted on the unspecified countries if the war came to an end.
“Then who knows? Maybe we won’t have to put them on. There’ll be so much peace,” he added, repeating his statement that the United States is ready to escort tankers through the Strait of Hormuz.
Vishakha Saxena, with AFP
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