US offers India 30-day waiver to buy Russian oil
New Delhi: Indian refiners are planning to lift more Russian crude cargoes after the US Friday permitted such purchases for 30 days to deal with the supply crunch caused by the Iran war, said people familiar with the matter.
Getting quick access to Russian oil, with available capacity stranded in the Arabian Sea and the Indian Ocean due to the conflict escalation, can partly ease India’s energy crisis. It however cannot fully compensate for lost supplies from the Gulf, which make up nearly half of India’s total crude imports.
The oil ministry on Thursday meanwhile tried to tackle its bigger worry of ensuring LPG supply to the masses by ordering refiners to maximise output and prohibiting them from using propane or butane — the main LPG constituents — for making petrochemicals.
State-run oil companies have been directed to supply their entire LPG output solely to households. India imports two-thirds of its LPG consumption, with the Gulf contributing nearly 90%.
Russian crude already loaded on tankers by March 5 can be bought by Indian refiners under the waiver, the US treasury department said in its order.
“This stop-gap measure will alleviate pressure caused by Iran’s attempt to take global energy hostage,” treasury secretary Scott Bessent posted on X on Friday.
Earlier, US President Donald Trump claimed that India had agreed to stop imports of Russian oil as part of trade negotiations between the two countries. New Delhi, however, didn’t confirm this.
The US waiver on Russian oil purchases also signals that the Iran war could stretch for weeks, creating prolonged supply uncertainties.
US energy secretary Chris Wright said that this measure will help stabilise oil prices and is not a change in policy toward Russia. He emphasised that higher energy prices are temporary and will normalise once the conflict subsides. On Friday, benchmark Brent topped $91 per barrel. Russian deputy prime minister Alexander Novak said Moscow is ready to satisfy additional demand for oil from New Delhi if the need arises. "Always ready," Novak said in Moscow on Wednesday when asked whether Russia plans to boost oil supplies to India amid the West Asia conflict. "Our oil is in demand. If they buy, we will sell," he said. In New Delhi, Russian ambassador Denis Alipov expressed Moscow's willingness to supply more crude oil to India.
"We have been open to supplying crude oil to India," Alipov told reporters on Thursday. The US waiver has come as a breather for Indian refiners struggling to find replacement barrels.
“While this provides a short-term logistical buffer, it cannot fully offset India’s 2.6 million barrels per day (mbd) exposure to Middle Eastern crude, and competition from Chinese buyers for the same Russian barrels will limit the upside,” said Sumit Ritolia, analyst at tanker tracker Kpler.
India took about 1 mbd of Russian oil last month and the US waiver could boost it to 1.8-2 mbd in the near term, he said.
Around 130 million barrels of Russian crude are floating on the water, including around 27 million barrels in the Arabian Sea/Indian Ocean region, about 20 million barrels near the Red Sea and Suez Canal routes, and about 7.5 million barrels around Singapore, according to Kpler.
Competition for Russian cargoes could push up prices. “As Indian refiners re-enter market for these grades, the deep discounts previously associated with Russian crude could narrow significantly, and prompt cargoes may even trade at premiums if competition for available barrels intensifies,” said Ritolia.
Getting quick access to Russian oil, with available capacity stranded in the Arabian Sea and the Indian Ocean due to the conflict escalation, can partly ease India’s energy crisis. It however cannot fully compensate for lost supplies from the Gulf, which make up nearly half of India’s total crude imports.
The oil ministry on Thursday meanwhile tried to tackle its bigger worry of ensuring LPG supply to the masses by ordering refiners to maximise output and prohibiting them from using propane or butane — the main LPG constituents — for making petrochemicals.
State-run oil companies have been directed to supply their entire LPG output solely to households. India imports two-thirds of its LPG consumption, with the Gulf contributing nearly 90%.
Russian crude already loaded on tankers by March 5 can be bought by Indian refiners under the waiver, the US treasury department said in its order.
“This stop-gap measure will alleviate pressure caused by Iran’s attempt to take global energy hostage,” treasury secretary Scott Bessent posted on X on Friday.
Earlier, US President Donald Trump claimed that India had agreed to stop imports of Russian oil as part of trade negotiations between the two countries. New Delhi, however, didn’t confirm this.
The US waiver on Russian oil purchases also signals that the Iran war could stretch for weeks, creating prolonged supply uncertainties.
US energy secretary Chris Wright said that this measure will help stabilise oil prices and is not a change in policy toward Russia. He emphasised that higher energy prices are temporary and will normalise once the conflict subsides. On Friday, benchmark Brent topped $91 per barrel. Russian deputy prime minister Alexander Novak said Moscow is ready to satisfy additional demand for oil from New Delhi if the need arises. "Always ready," Novak said in Moscow on Wednesday when asked whether Russia plans to boost oil supplies to India amid the West Asia conflict. "Our oil is in demand. If they buy, we will sell," he said. In New Delhi, Russian ambassador Denis Alipov expressed Moscow's willingness to supply more crude oil to India.
"We have been open to supplying crude oil to India," Alipov told reporters on Thursday. The US waiver has come as a breather for Indian refiners struggling to find replacement barrels.
“While this provides a short-term logistical buffer, it cannot fully offset India’s 2.6 million barrels per day (mbd) exposure to Middle Eastern crude, and competition from Chinese buyers for the same Russian barrels will limit the upside,” said Sumit Ritolia, analyst at tanker tracker Kpler.
India took about 1 mbd of Russian oil last month and the US waiver could boost it to 1.8-2 mbd in the near term, he said.
Around 130 million barrels of Russian crude are floating on the water, including around 27 million barrels in the Arabian Sea/Indian Ocean region, about 20 million barrels near the Red Sea and Suez Canal routes, and about 7.5 million barrels around Singapore, according to Kpler.
Competition for Russian cargoes could push up prices. “As Indian refiners re-enter market for these grades, the deep discounts previously associated with Russian crude could narrow significantly, and prompt cargoes may even trade at premiums if competition for available barrels intensifies,” said Ritolia.
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