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Informist, Friday, Mar. 6, 2026

 

By Ashutosh Pati

 

MUMBAI – The US' 30-day waiver enabling Indian refiners to buy Russian crude oil is more of a short-term relief and is unlikely to compensate the loss of supply due to the closure of the Strait of Hormuz, analysts said. Indian refiners will also face competition from Chinese counterparts to secure Russian crude oil cargoes stranded at sea, they said.

 

"In the near term, India could import around 1.5–2.0 million barrels per day of Russian crude, which would help partially cushion supply risks," Nikhil Dubey, senior refining analyst at global trade analytics firm Kpler, told Informist. Last month, India imported just over a million barrels per day of Russian crude oil, according to data from Kpler.

 

US Treasury Secretary Scott Bessent Friday said the US is issuing a 30-day waiver to allow Indian refiners to buy Russian oil. "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 post on X, formerly Twitter. "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."

 

"It's a short term measure to keep global oil supplies flowing amid disruptions linked to the Middle East (West Asia)," Jigar Trivedi, senior research analyst at Reliance Securities, said. Indian refiners have begun buying millions of barrels of Russian oil for prompt delivery as they seek to secure alternative supplies amid uncertainties in West Asia, Trivedi said.

 

The Strait of Hormuz, through which a fifth of global crude oil supply flows, has effectively been shut after the US and Israel struck Iran and killed its Supreme Leader Ayatollah Ali Hosseini Khamenei Saturday.

 

"With nearly 50% of India's crude imports transiting the Strait of Hormuz, the country remains highly exposed to potential supply disruptions," Sumit Ritolia, lead research analyst, refining and modelling at Kpler, said in a note. "The U.S. waiver allowing additional purchases of Russian crude over baseload offers short-term relief, though competition from Chinese buyers for the same barrels could limit the extent of India's benefit," Ritolia added.

 

India had reduced its oil imports from Russia in recent months amid trade negotiations with the US. Around 130 million barrels of Russian crude was at sea as of early March, including significant volumes across the Indian Ocean, Red Sea/Suez routes, and around Singapore, which could potentially be redirected toward Indian ports if commercial deals are finalised, Ritolia said.

 

Kpler's Dubey said around 24 million barrels of Russian crude are currently floating near Indian shores. "Some of these cargoes are already destined for buyers in India and China, but a portion is still looking for a home and could act as a short-term supply buffer, particularly as crude tanker traffic through the Strait of Hormuz has effectively stalled," he added. These barrels which aren't destined for anywhere yet are of around 5-6 million barrels.

 

However, these barrels would not be enough to compensate the significant loss of supply from West Asia and the closure of the Strait of Hormuz. "...while this floating supply provides some near-term logistical flexibility, it cannot fully offset India's (around) 2.5 million barrels per day exposure to Middle Eastern (West Asian) crude," Dubey said.

 

In February, India imported total 5.2 million barrels per day of crude oil, of which West Asian countries such as Iraq, Saudi Arabia, and United Arab Emirates constituted around 2.5 million barrels per day, Kpler data showed. This translates to 48% of India's total oil imports last month. Other West Asian nations such as Qatar and Oman supplied nearly 233,000 barrels per day and 25,000 barrels per day, respectively, last month.

 

"From a market perspective, the policy shift could also tighten the availability of Russian export barrels globally," Ritolia said. "As Indian refiners re-enter the 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," he said.

 

Ajay Kedia, director of Kedia Stocks and Commodities, also said heightened buying from Chinese refiners could constrain Russia's spare capacity to redirect more crude oil to India in the near term, pressuring New Delhi to pay premiums or draw stocks.  End

 

Edited by Ashish Shirke

 

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