Indian refiners have begun buying some of the over 15 million barrels of Russian crude currently floating on tankers near the country, as they move to offset supply concerns arising from disruptions in the Middle East. 

According to a report from PTI, refiners stepped up purchases after the US Treasury Department issued a 30-day licence allowing India to buy Russian oil cargoes currently stuck at sea. 

India, which was among the top buyers of Russian oil, curtailed purchases after the US pressured New Delhi to avoid buying Russian barrels to reduce money flowing to Moscow's war effort in Ukraine. 

India's imports of Russian crude in February fell to 1.04 million barrels per day, the lowest since November 2022. The US had made cuts to tariffs on Indian goods contingent on New Delhi reducing its purchases of Russian crude. 

Temporary US waiver 

India, which had turned to buying discounted Russian crude following Western sanctions in February 2022, is now adjusting its purchases amid disruptions in West Asia supplies. 

The country had previously imported record volumes of Russian oil when cargoes were available at deep discounts, helping refiners offset rising global crude prices. Russian cargoes hit a peak of 2.15 million barrels per day in May 2023. 

However, with the widening West Asia conflict blocking shipments through the Strait of Hormuz and raising concerns over oil and LNG supplies from the Middle East, Indian refiners are now balancing purchases from both Russian cargoes at sea and other sources to ensure an uninterrupted domestic fuel supply. 

"President Trump's energy agenda has resulted in oil and gas production reaching the highest levels ever recorded," US Treasury Secretary Scott Bessent said. "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." 

Calling the move a stopgap measure, he said Washington expects India to eventually buy more US oil. 

"India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of US oil. This stop-gap measure will alleviate pressure caused by Iran's attempt to take global energy hostage," Bessent said in a post on X. 

The short-term measure will not provide significant financial benefit to the Russian government as it only authorises transactions involving oil already stranded at sea, he added. 

Refiners look to build inventories 

India, which has inventories to cover for 25 days of demand for crude, the raw material for fuels such as petrol and diesel, sources 40–50% of its crude oil needs from West Asia through the Strait of Hormuz. The escalating conflict in West Asia has effectively shut the strait. 

Indian refiners had already been importing around 1 million barrels per day of Russian crude in recent months, meaning the waiver effectively acts as a green signal to lift volumes above this base load, he said.