India continues buying Russian oil, studying legal implications of US waiver: Govt sources

Government sources say India continues Russian oil imports, has diversified supply routes beyond the Strait of Hormuz, and is prioritising LPG production.

• India continues to buy crude oil from Russia since 2022
• India has diversified oil imports beyond the Strait of Hormuz
• India's oil, LPG, and refined product supplies remain stable

Did our AI summary help?

India continues to purchase crude oil from Russia and has not stopped imports since 2022, government sources said, even as global energy markets remain volatile amid the escalating conflict in the Middle East.

“India continues to buy crude oil from Russia. India has never stopped buying Russian oil since 2022,” a government source said. Russia remained the largest supplier of oil to India in February, the source added.

The comments come amid US Treasury Department's notice, on March 6, issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil. “This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorises transactions involving oil already stranded at sea,” United States Secretary of the Treasury Scott Bessent said in a post on X.

Analysts however said that the US waiver does little to reduce the country’s exposure to the Middle Eastern supply flows and potential disruptions. "The US 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,” said Sumit Ritolia, lead research analyst, refining and modelling at Kpler.

Official sources also said that India has not imported any sanctioned Russian oil.

The government and Indian companies are now studying the legal implications of the latest US waiver that allows imports of Russian oil from sanctioned entities, sources told Moneycontrol.

The US has for months pressured New Delhi to stop its purchases of Russian oil. While announcing the India-US trade deal, US President Donald Trump said India agreed to stop buying Russian oil.

India will decide its own crude sourcing

Government sources emphasised that India determines its crude sourcing decisions independently based on domestic needs.

“India takes its own decision where to source crude oil from. India is answerable to its consumers,” the source said.

India has emerged as one of the largest buyers of Russian crude since 2022, after Western sanctions on Moscow led to discounted oil being redirected towards Asian markets.

Russia accounted for 0.2% of India’s total oil imports before the Russia-Ukraine conflict. India used to buy 800,000 barrels per day of crude from five countries in the Gulf including Saudi Arabia, UAE, Qatar, Kuwait and Iraq, before the Russia-Ukraine conflict, sources said.

Oil supplies diversified beyond Strait of Hormuz

Officials said India has significantly diversified its energy sourcing beyond the Strait of Hormuz, which has become a key geopolitical risk point amid the widening Middle East conflict.

“Today, we have more energy sourced from different parts of the world other than the Strait of Hormuz,” the source said.

According to the government, 55 percent of India’s crude oil imports in February originated from regions outside the Strait of Hormuz.

Officials also pointed to alternative routes such as the Habshan–Fujairah oil pipeline in the UAE and the Yanbu pipeline in Saudi Arabia that bypass the strait.

Government says India comfortable on oil and LPG supplies

Government sources said India remains well positioned in terms of crude oil, refined product and LPG availability.

“India is very comfortably placed in its oil, refined products, and LPG supplies,” the source said.

The government has instructed both public and private refiners to prioritise LPG production and avoid diverting propane and butane for petrochemical manufacturing.

“Indian government has passed order to all public and private refiners to produce more LPG and not divert or utilise propane and butane for other petrochemical products,” the source said.

Officials added that India has substantial refining capacity and could shift output priorities if required.

“India has enormous refining capacity. Instead of producing other petchem products, we will produce more LPG,” the source said.

LNG supplies under review after Qatar force majeure

The government is also reassessing gas allocation after QatarEnergy and Petronet LNG invoked force majeure on LNG supplies following disruptions linked to the Middle East conflict.

“Government may re-prioritise gas allocation to industrial sectors amid force majeure invoked by QatarEnergy and Petronet LNG,” the source said.

India imports roughly 30 percent of its LNG through routes connected to the Strait of Hormuz.

Officials said the government is already seeking additional LNG cargoes to ensure supply stability.

“We are scouting for more LNG cargoes, re-prioritising gas allocations so that no Indian consumer is directly impacted,” the source said.

One state-run company has already secured an additional LNG cargo, the source added.

Refineries remain adequately stocked

Government sources also addressed reports regarding Mangalore Refinery and Petrochemicals Ltd (MRPL), stating that Indian refiners have sufficient crude supplies.

“MRPL and all other Indian refineries are adequately stocked and have enough crude oil,” the source said.

Energy imports from US could increase

Officials also said India is open to expanding energy imports from the United States if additional supplies become available.

“We were already buying $15 billion worth energy products from the US. If US has more energy to offer, we will buy,” the source said.

Earlier in the day, Bessent also said that India is an essential partner of the United States, and that Washington fully anticipates 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.

Government says vulnerability on LPG easing

According to government officials, India’s position on LPG supplies has improved in recent days.

“Few days ago, we were more vulnerable on LPG supplies. Today, we are at a comfortable position in LPG, crude oil and refined products supplies,” the source said.

The reassurances come as tensions in the Middle East continue to disrupt energy markets and raise concerns over potential supply shocks linked to the Strait of Hormuz.