OilTrade – US Allows India Limited Purchase of Russian Oil Already at Sea
OilTrade – The United States has allowed India to purchase certain Russian oil cargoes that are already at sea, a move aimed at preventing short-term disruptions in global energy supplies during the ongoing tensions in West Asia. The decision applies only to oil that had already been loaded onto ships before new restrictions were enforced, according to senior officials from the US administration.
Temporary step to stabilise global oil supply
US Treasury Secretary Scott Bessent said the decision was taken to help maintain stability in global oil markets. Speaking in an interview with Fox Business, he explained that the Treasury Department had permitted India to buy Russian crude that is currently floating in storage on ships.
Bessent noted that the world’s oil supply remains generally adequate, but short-term disruptions can still occur due to geopolitical developments. Allowing these shipments to reach buyers was described as a practical measure to prevent unnecessary pressure on markets.
He added that Indian authorities had previously cooperated with Washington’s request to halt purchases of sanctioned Russian oil earlier in the year. India had planned to increase imports from the United States as an alternative source. However, the current arrangement is intended to bridge a temporary supply gap.
Large volumes of sanctioned oil stored at sea
According to the Treasury Secretary, hundreds of millions of barrels of sanctioned Russian crude are currently stored on vessels in different parts of the world. In some cases, these shipments have been unable to find buyers because of sanctions and trade restrictions.
Bessent said the US government is examining ways to release some of these stored volumes into the market in order to stabilise prices and maintain adequate supply. He stressed that any such actions would be limited and carefully timed to provide relief during the present geopolitical situation.
Officials have indicated that additional steps could be announced gradually if market conditions require them.
US officials explain short-term policy adjustment
Several members of the US administration have publicly confirmed the limited permission granted to India. Energy Secretary Chris Wright wrote on social media platform X that Washington had allowed India to process Russian oil already loaded on ships near Southern Asia.
According to Wright, Indian refineries will be able to refine the crude and quickly release the refined products into the market. This approach is expected to help maintain a steady flow of fuel supplies and reduce pressure on global oil prices.
Wright emphasised that the measure is designed specifically to address short-term market conditions created by the ongoing US-Israel conflict with Iran and concerns about shipping routes in the region.
Strait of Hormuz concerns affecting markets
In a separate interview with ABC News Live, Wright said that while long-term global oil supply remains strong, immediate market pressures have emerged due to concerns about transport routes such as the Strait of Hormuz.
The Strait is one of the world’s most important oil transit corridors, and any disruptions there can quickly affect global prices. Wright said that moving the stored Russian oil into Indian refineries would immediately increase supply available to markets.
He also pointed out that China had previously been one of the buyers of such shipments, but changes in purchasing patterns had left some cargoes stranded at sea. Redirecting them to India, he said, would help balance supply across different markets.
Limited waiver for Indian refiners
Earlier this week, the US government announced a temporary 30-day waiver allowing Indian refiners to purchase Russian crude that had already been loaded on vessels before March 5, 2026.
Under the authorization issued by the Treasury Department, transactions related to the delivery or offloading of such cargoes will be permitted until April 4, 2026. The shipments must be delivered to ports in India and purchased by entities registered under Indian law.
Officials clarified that the waiver applies only to these specific shipments and does not represent a broader easing of sanctions on Russia.
Trade and energy ties between India and the United States
Bessent said the measure should not provide significant financial benefit to Moscow because it only involves oil that was already stranded at sea. He described the step as a limited and temporary adjustment intended to prevent energy shortages.
He also noted that India remains an important strategic partner for the United States and is expected to expand imports of American energy products in the future.
The announcement follows recent progress in trade discussions between the two countries. Last month, Washington and New Delhi agreed on a framework for an interim trade agreement, and the US administration removed earlier punitive tariffs imposed on Indian goods.
Those tariffs had been introduced after Washington raised concerns that India’s purchases of Russian oil were helping support Russia’s military operations in Ukraine.