India bought 1.87 million barrels of Russian oil per day in May so far, meeting approximately 40 per cent of its oil imports.
In a relief to refiners in India, the United States extended its waiver from sanctions on purchasing Russian crude oil and petroleum products for a month to temporarily provide 'the most vulnerable nations' access to fuel produced in the Eurasian country and stranded at sea.
Key Points
- US Treasury said extension aims to stabilise crude markets and support energy-vulnerable nations facing supply disruptions.
- India imported nearly 1.87 million barrels per day of Russian oil during May, meeting 40 per cent demand.
- Constraints from West Asian suppliers pushed Indian refiners to increase dependence on discounted Russian crude oil supplies.
Russian Oil Import Relief
According to an order by the US department of the treasury's office of foreign assets Ccontrol (Ofac), countries are authorised to procure Russian oil loaded on or before April 17.
This can be done until June 17.
'This extension will provide additional flexibility and we will work with these nations to provide specific licenses as needed,' US Treasury Secretary Scott Bessent said in a post on X.
'This general licence will help stabilise the physical crude market and ensure oil reaches the most energy-vulnerable countries,' Bessent added.
US Waiver Extended Again
Bessent said the 30-day window would help reroute existing supplies to countries most in need. This will be by reducing China's ability to stockpile discounted oil.
The earlier US waiver lapsed on May 16.
A government official said on May 18 that Indian refiners would continue buying crude oil from Russia even in the absence of a US waiver.
"I would like to emphasise that we have been purchasing (crude oil) from Russia before and during the waiver. We are buying even now. There should be commercial sense for oil-marketing companies to purchase (Russian oil)," said Sujata Sharma, joint secretary at the ministry of petroleum and natural gas (MoPNG).
Refiners Face Payment Challenges
Experts say the US waiver has enabled Indian oil firms to buy crude oil from sanctioned Russian entities, ensuring fuel availability.
"Oil companies in India will have to scale back purchases (of Russian oil) if the US waiver is not renewed, given the payment constraints and other related issues," Prashant Vashisht, senior vice-president and co-group head, corporate ratings, ICRA, had said on May 15.
India Boosts Russian Purchases
India has ramped up purchases from Russia, primarily on the back of the US waiver, since the war started in West Asia.
The country bought 1.87 million barrels of Russian oil per day (bpd) in May so far, meeting approximately 40 per cent of its oil imports, showed the data from maritime intelligence firm Kpler.
Under the US sanctions, countries are allowed to purchase Russian oil from sanctioned entities, including Rosneft and Lukoil, which Washington had previously sanctioned.
Prior to the sanctions, the two oil producers supplied around 60 per cent of India's purchase of Russian oil.
West Asia Supply Constraints
As supply from India's traditional suppliers in West Asia, such as Iraq, Saudi Arabia and Qatar, remains constrained, refiners have increased reliance on Russian crude oil.
Feature Presentation: Ashish Narsale/Rediff
