- US aims to end sanction waivers for Russian oil imports to countries like India soon
- Waivers were temporary to ease global oil supply after Iran conflict impact
- India relies on imported oil for almost 90% of its consumption
Fresh uncertainty hangs over New Delhi's oil imports after the Donald Trump administration in the United States said it wants to end, "as soon as possible", the sanction waivers granted to countries like India purchasing Russian oil. Testifying before the Senate Foreign Policy Committee, US Secretary of State Marco Rubio contended that these measures were time-limited to ease global supplies in the wake of the Iran war.
"We would like to end it as soon as we possibly can because the underlying policy of this country has been to sanction their oil. These are time-limited waivers for the purpose of opening up more global supply," Rubio told the committee.
The US Secretary of State said the sanctions waiver was an attempt to alleviate the global effect of the rising oil prices.
"The problem we're facing, too, is there's a contagion potential, and that is that at some point we can do strategic reserves, we can do some of the other things that we've done to alleviate global supply, but at some point you have to ensure -- this is not so much for us," Rubio said.
He added that at the end of the day, the US economy is not in need of such measures, but other economies around the world have benefited from the Russian waiver.
US Waivers
The US granted a waiver from sanctions on the purchase of Russian oil in March and extended it twice. The last extension was granted on May 17 for one month. India is among the countries that have benefited from the waiver from US sanctions on the purchase of Russian oil.
Last month, according to a Bloomberg report, New Delhi sought an extension of waivers from the United States amid surging crude prices.
How The Move Will Affect India
India is dependent on imports for almost nine-tenths of its oil consumption. New Delhi found a cost-effective partner in Moscow following the conflict in Ukraine, when Russia offered steep discounts on crude following Western sanctions.
Data from energy intelligence firm Kpler shows India imported a record-shattering 2.3 million barrels per day of Russian crude last month, supported by the continued import of cargoes under the sanctions waiver.
Analysts have pointed out that India's continued imports of Russian oil have helped prevent a sharper energy crisis during the war in Iran and the closing of the Strait of Hormuz. Should the waiver expire, domestic refiners could face the prospect of sourcing more expensive crude from the spot market elsewhere.
But for India, the issue extends far beyond oil. The US sanctions targeting the purchase of Russian oil formed part of the Trump administration's strategy to tighten economic pressure on Russia over the Ukraine war. However, New Delhi has consistently maintained that energy purchases are driven by national interest, affordability and energy security. The government has repeatedly defended its right to buy oil from whichever supplier best meets the country's needs.
