Just days ago, India appeared to be running out of room to manoeuvre on one of the most sensitive questions in its energy policy: Russian oil.
Amid negotiations over an interim trade framework with Washington, Indian refiners had been steadily cutting Russian crude purchases. The expectation in policy and market circles was that New Delhi would soon halt such imports altogether, according to reports by Reuters.
But the eruption of war in West Asia, triggered by US and Israeli military strikes on Iran and the killing of Supreme Leader Ayatollah Ali Khamenei, has dramatically reshaped the geopolitical and energy landscape.
On Friday, the United States quietly handed India a temporary reprieve.
US Treasury Secretary Scott Bessent announced a 30-day waiver allowing Indian refiners to buy Russian crude cargoes currently stranded at sea — a short-term measure aimed at stabilising global oil markets amid the unfolding conflict.
“To enable oil to keep flowing into the global market, the Treasury Department is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil,” Bessent said in a statement posted on X.
“This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorizes transactions involving oil already stranded at sea,” he said.
Bessent added that Washington still expects India to increase purchases of American energy.
“India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of US oil,” he said. “This stop-gap measure will alleviate pressure caused by Iran’s attempt to take global energy hostage.”
India had been pulling back from Russian oil
The waiver comes after months of declining Russian crude imports as India navigated Western pressure and trade negotiations with Washington.
According to a Bloomberg report, Indian refiners had been keeping Russian purchases to a minimum amid uncertainty over a proposed trade deal that involved reducing tariffs in exchange for curbing such imports.
At its peak after Russia’s 2022 invasion of Ukraine, India was buying roughly 2 million barrels per day of discounted Russian crude. But those volumes have fallen sharply.
Industry data cited by Reuters showed that India imported about 1.1 million barrels per day of Russian oil in January, the lowest level since late 2022, with Moscow’s share of India’s imports dropping to just over 21%.
The pullback forced refiners to rely more heavily on suppliers in West Asia, Latin America and the United States. West Asian crude accounted for about 55% of India’s imports in January, according to industry data cited by Reuters.
That shift, however, has suddenly exposed India to a new risk.
War shakes Dalal Street and supply routes
The widening conflict in West Asia has rattled global markets and disrupted energy flows.
Indian equities fell sharply earlier this week as the crisis intensified. The benchmark Sensex dropped more than 1,100 points while the Nifty 50 declined 1.55%, wiping out more than ₹10 lakh crore in market capitalisation, The Economic Times reported.
Oil prices also surged amid volatility after attacks on shipping routes around the Strait of Hormuz, the narrow passage through which roughly one-fifth of the world’s oil supply passes.
India, the world’s third-largest oil importer, is particularly vulnerable to disruptions in the region. Around 40% of its crude imports transit the strait, and the country’s reserves cover only about 25 days of demand, according to a Reuters report.
With tanker traffic disrupted and Gulf supplies under threat, Indian refiners have begun scrambling to secure alternative cargoes.
Meanwhile, state-run refiners including Indian Oil Corporation, Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited and Mangalore Refinery and Petrochemicals Limited have been negotiating with traders for Russian cargoes arriving in March and early April.
One source involved in the discussions told Reuters that refiners have already purchased about 20 million barrels of Russian oil from traders.
Russian barrels waiting at sea
Ironically, the same Russian crude that India had been avoiding in recent months may now provide the fastest solution to a supply crunch.
A report by Bloomberg reveals that more than 15 million barrels of Russian oil are currently floating on tankers in the Arabian Sea and the Bay of Bengal, close enough to reach Indian ports within a week.
Another eight vessels carrying roughly 7 million barrels of Russia’s Urals crude are idling off Singapore and could also arrive quickly if redirected.
Ship-tracking data compiled by Bloomberg shows that several tankers had already begun signalling Indian destinations even before the US waiver was announced.
Analysts say the volumes could allow Indian refiners to quickly ramp up imports if necessary.
“Refiners could quickly ramp up purchases again, potentially pushing volumes back above 2 million barrels a day in the near term,” said Sumit Ritolia, an analyst at Kpler, told Bloomberg.
A temporary opening
For Washington, the waiver appears designed to address a short-term supply shock without weakening sanctions on Moscow.
But for India, it offers something more significant: breathing room at a moment when energy security has suddenly become far more uncertain.
The war in West Asia has upended the delicate balance New Delhi had been trying to maintain between geopolitical pressure and commercial energy needs.
And in an unexpected twist, the very Russian cargoes India had been moving away from may now become the quickest buffer against the region’s most volatile crisis in years.
