ABP Deep Dive | Why US ‘Allowed’ India To Buy Russian Oil — Did Strait Of Hormuz Tensions Force

The United States’ decision to temporarily allow India to resume certain purchases of Russian oil has triggered debate over Washington’s sanctions stance, especially after months of pressure on New Delhi to cut energy ties with Moscow.

The move comes as global oil markets face renewed volatility following escalating tensions in West Asia and disruptions to shipping routes through the Strait of Hormuz, one of the world’s most critical energy transit corridors.

Earlier this week, Washington issued a 30-day waiver “allowing” Indian refiners to buy Russian crude already loaded on vessels before March 5.

Policy Shift After Months Of Pressure

The decision marks a notable shift from earlier US policy. Trump administration had repeatedly criticised India for purchasing discounted Russian crude and had urged New Delhi to reduce such imports.

When Trump and Prime Minister Narendra Modi announced a trade agreement earlier this year, India signalled it would scale back Russian oil purchases as part of broader economic cooperation with Washington.

However, rising oil prices and supply uncertainties linked to tensions in the Gulf region appear to have prompted a temporary rethink.

US Treasury Secretary Scott Bessent described the waiver as a short-term step intended to stabilise global energy markets.

“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.

Did Strait Of Hormuz Tensions Shift US Policy?

Officials in the Trump administration have indicated that the decision was largely driven by the need to ease supply pressures caused by disruptions around the Strait of Hormuz.

US Energy Secretary Chris Wright said Washington had authorised India to purchase Russian crude already loaded on ships so that those barrels could quickly enter the global market.

He said the administration had introduced “short-term” steps aimed at preventing oil prices from climbing further, explaining that India was being allowed to refine oil that was already in transit and release those supplies into the market.

In an interview with ABC News Live, Wright stressed that the measure was temporary and linked to current supply disruptions.

He noted that oil prices were being pushed higher because of constraints affecting shipments through the Strait of Hormuz. According to him, several cargoes of Russian crude were already floating near Asian waters due to reduced demand from other buyers.

Wright said Washington had encouraged India to take those cargoes and process them in its refineries, which would immediately bring the stored oil into the market and ease competition for other refiners worldwide.

He added that the administration was adopting several such short-term measures to stabilise prices, emphasising that the step should not be interpreted as a broader shift in the United States’ policy towards Russia.

Trump Says Move Aimed At Easing Oil Pressure

Speaking to reporters aboard Air Force One, President Donald Trump said the US could consider additional measures if necessary to reduce pressure on global oil markets.

Responding to questions about the waiver to India and whether Washington might take further steps, including tapping the Strategic Petroleum Reserve, Trump said, “If there were some, I would do it just to take a little of the pressure off.”

He added, “I think that the oil pressure– there’s a lot of oil. We’ve got a lot of oil. Our country has a tremendous amount and we have, there’s a lot of oil out there. That’ll get healed very quickly.”

Waiver Amid Strait Of Hormuz Tensions

The United States Department of the Treasury earlier issued an order granting a 30-day licence permitting the delivery and sale of certain Russian crude oil and petroleum products to India.

The decision came as shipping routes through the Strait of Hormuz faced disruption due to the ongoing conflict in the region.

Bessent said the measure was designed to ensure that oil continued flowing into the global market despite supply challenges.

“President Trump’s energy agenda has resulted in oil and gas production reaching the highest levels ever recorded. 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,” he said.

He stressed that the waiver was narrowly targeted and would not significantly benefit Moscow.

“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,” Bessent said.

Relief For Indian Refiners?

The waiver could provide short-term relief for Indian refiners facing supply uncertainty.

Before the Russian invasion of Ukraine, India purchased relatively small quantities of Russian crude. However, imports increased significantly after discounted Russian oil entered global markets.

Energy experts say the current waiver could help ensure refinery operations continue smoothly during a period of supply volatility. “It’s a saving grace for Indian refineries,” Carole Nakhle, chief executive of the consultancy Crystol Energy told DW.

According to maritime analytics firm Kpler, India imported slightly over one million barrels per day of Russian crude in February, compared with roughly 1.1 million barrels per day in January and 1.2 million barrels per day in December.

Energy analyst Sumit Ritolia said allowing refiners to temporarily increase Russian crude purchases would provide an alternative supply cushion and help maintain feedstock availability.

About India’s Oil Supply Position

The waiver also comes months after the Trump administration imposed 25 per cent punitive tariffs on India over its purchases of Russian oil, arguing that such imports were helping finance Moscow’s war in Ukraine.

Those tariffs were later lifted after the two countries reached a framework for an interim trade arrangement under which India committed to reducing Russian oil purchases while expanding imports of American energy.

India currently imports about 5.5–5.6 million barrels of crude oil per day, accounting for nearly 90 per cent of its domestic consumption.

Officials say the country’s supply position remains comfortable despite the tensions in the Gulf.

Around 15 million barrels of crude oil are currently aboard tankers in the Arabian Sea and the Bay of Bengal, while ships carrying another seven million barrels are waiting near Singapore. Additional cargoes travelling through the Mediterranean Sea and the Suez Canal are expected to reach Indian ports within the coming week, Times Of India reported.

Before 2022, Russian crude accounted for just 0.2 per cent of India’s oil imports. However, purchases rose sharply after Moscow began offering crude at deep discounts, making Russia one of India’s major energy suppliers in recent years.