US allows India to buy Russian oil amid Middle East conflict

The US Department of Treasury (DoT) has issued a 30-day waiver allowing India to resume some purchase of Russian crude oil amid the ongoing US-Israel conflict with Iran.

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The US DoT’s Office of Foreign Assets Control (OFAC) has allowed India to purchase Russian crude and other petroleum products stuck at sea, amid reduced shipment through the Strait of Hormuz.

“The [US] Treasury Department is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil,” US treasury secretary Scott Bessent said in statement posted on social media platform X (formerly Twitter).

India and China are dominant buyers of Strait-transiting crude, according to cargo tracking platform Kpler. India receives about 40% of its oil imports from the Middle East through the critical waterways, Reuters reported.

Indian refiners are buying millions of bbls of prompt Russian crude cargoes to avoid an oil supply crunch due to the Middle East conflict, Reuters reported, citing six sources.

“This action by the US is part of the administration's plan to try to cap oil prices,” two analysts from ING Bank noted.

The measure is unlikely to deliver meaningful financial gains to the Russian government, as it only allows transactions involving oil already stranded at sea, Bessent said, adding that Washington expects New Delhi to “ramp up” purchases of US oil.

“This stop-gap measure will alleviate pressure caused by Iran’s attempt to take global energy hostage,” Bessent added.

The announcement follows months of US pressure on India to reduce purchases of Russian oil in a bid to cut funding for Moscow’s aggression in Ukraine.

“While this might help put some immediate downward pressure on the market, it is not a gamechanger,” ING Bank analysts added.

By Aparupa Mazumder

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