US waiver on Russian oil offers India short-term relief; Chinese competition, Gulf exposure limit gains

There’s around 15 million barrels of Russian crude on tankers in the Arabian Sea and the Bay of Bengal, while vessels carrying another 7 million are idling near Singapore

• US grants India a 30-day waiver to buy Russian oil
• India's crude supply gets short-term relief, but risks remain
• Competition from China may limit India's benefit from Russian oil

Did our AI summary help?

The US's 30-day waiver for Indian refiners to continue buying Russian oil offers a near-term relief to India’s crude supplies. However, it does little to reduce the country’s exposure to the Middle Eastern supply flows and potential disruptions, analysts say.

With nearly 50 percent of India’s crude imports transiting the Strait of Hormuz, the country remains highly exposed to potential supply disruptions. Further, competition from China for the same barrels may limit India’s benefits, as per data and analytics firm Kpler.

“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.

To enable oil to keep flowing into the global market, the US Treasury Department, on March 6, issued 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.

Moneycontrol had earlier reported that India is putting in place a contingency plan, which includes exploring new routes and increased intake of Russian barrels, to secure crude supply as widening West Asia conflict poses risk to energy security.

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.

Kpler noted that the waiver does not fundamentally change India’s structural exposure to Middle Eastern supply flows.

“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 baseload, particularly for cargoes currently delayed across key shipping routes,” Ritolia said.

As of early March 2026, ~130 million barrels of Russian crude remain on the water, including significant volumes across the Indian Ocean, Red Sea, Suez Canal, and around Singapore, which could potentially be redirected towards Indian ports, if commercial deals are finalised, Kpler data suggested.

As a result, India’s import of Russian oil, which has significantly dropped in the last two months to 1.2 million barrels per day, is expected to again surge to 1.6 million bpd. Analysts also expect Russian oil imports to reach its previous high of 2.0 million bpd (June 2025) in the near term, if the West Asia conflict is prolonged.

“With the waiver now in place, Indian refiners could quickly resume purchases, potentially pushing Russian inflows around 1.6 to 2 million bpd in the near term. While this provides a short-term logistical buffer, it cannot fully offset India’s ~2.6 Mbd exposure to Middle Eastern crude, and competition from Chinese buyers for the same Russian barrels will limit the upside,” Kpler highlighted.

So far this month, India has imported roughly 7.5 million barrels of Russian crude, as per Kpler data.

“At the same time, about 24 million barrels of Russian crude are currently floating near Indian shores. Of course, some of these cargoes are already destined for buyers in India and China, but a portion of the barrels are still looking for a home and could provide a supply buffer as crude tanker traffic through the Strait of Hormuz has effectively stalled,” said Nikhil Dubey, senior research analyst, refining and modeling at Kpler.

India’s imports of Russian oil stood at 1.1 million bpd in February, down from 1.2 million bpd in January. Russia’s share in India’s imports declined to 20 percent in February from 23 percent in the previous month, while Saudi Arabia accounted for 19.6 percent of oil imports, up from 15 percent in January.

Indian refiners to prioritise domestic fuel availability

For Indian refiners, renewed access to Russian crude would support feedstock security and margins. However, there has been no official indication of product export curbs from the Indian government. Official sources told Moneycontrol that the government does not see any need to curb India's refined oil products. However, if the conflict escalates and there is a need to safeguard domestic supplies, the government might take a decision then.

In the near term, refiners are likely to prioritise domestic fuel availability and comfortable stock levels, meaning the increase in crude availability may not immediately translate into higher product exports, industry sources said.

“From a market perspective, the policy shift could also tighten the availability of Russian export barrels globally. As Indian refiners re-enter the market for these grades, the deep discounts previously associated with Russian crude could narrow significantly, and prompt cargoes to even trade at premiums if competition for available barrels intensifies,” Ritolia said.