‘Indians had been very good actors’: US ‘allows’ India to resume Russian oil buys to cool prices

MUMBAI – The United States may temporarily soften some restrictions on Russian oil supplies and allow India to keep buying certain cargoes, as Washington looks for ways to calm global energy markets during the ongoing crisis in West Asia.

The indication came from US Treasury Secretary Scott Bessent, who said Washington had already allowed India limited flexibility after disruptions to global oil shipments pushed prices higher.

The move reflects growing concern in Washington that escalating tensions around the Strait of Hormuz could squeeze global supplies and send crude prices soaring, affecting economies worldwide.

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Speaking to Fox Business, Bessent said India had earlier complied with a US request to stop purchasing sanctioned Russian crude.

“The Indians had been very good actors. We had asked them to stop buying sanctioned Russian oil this fall. They did,” he said.

According to Bessent, India had initially planned to replace those supplies with crude from the United States.

“They were going to substitute it with US oil,” he added.

However, disruptions to shipping routes and sharply rising insurance costs for tankers passing through the Strait of Hormuz forced Washington to allow a temporary adjustment.

“To ease the temporary gap of oil around the world, we have given them permission to accept the Russian oil,” Bessent said.

The US Treasury Secretary also suggested that the administration could reconsider sanctions affecting Russian crude already stranded at sea.

“There are hundreds of millions of sanctioned barrels of sanctioned crude on the water,” he said.

He indicated that lifting restrictions on those cargoes could quickly add supply to global markets.

“In essence, by unsanctioning them, Treasury can create supply. And we are looking at that,” Bessent said.

Temporary waiver issued as Gulf crisis disrupts shipping

Separately, US authorities have granted a 30-day waiver allowing Indian refiners to buy Russian oil currently stuck in transit, a step aimed at easing pressure on energy markets.

Bessent said the measure was designed as a short-term fix and would not significantly benefit Russia financially since it only covers oil already stranded on tankers.

He also stressed that Washington expects India to expand purchases of American crude over time.

President Donald Trump has also announced plans to stabilise maritime energy trade by expanding government-backed insurance coverage for shipments travelling through the Gulf region.

The initiative is intended to reassure shipping companies and insurers worried about security risks as tensions with Iran escalate.

Oil prices have surged in recent days amid fears that the conflict could disrupt shipments through the narrow waterway that connects the Persian Gulf with global markets.

Dozens of tankers have reportedly faced delays as war-risk insurance premiums for vessels using the route have jumped sharply.

India says energy supplies remain comfortable

India, which sources roughly 40 per cent of its crude imports from the Middle East, relies heavily on shipments moving through the Strait of Hormuz.

Government sources say New Delhi is reviewing the energy situation twice a day but remains in a comfortable position.

Officials say there is currently no shortage of LPG, LNG, or crude oil globally, and India’s existing stock levels remain adequate.

Petroleum Minister Hardeep Singh Puri also reassured consumers that supplies are secure.

“Our priority is to ensure availability of affordable and sustainable fuel for our citizens, and we are doing it comfortably. There is no shortage of energy in India and there is no cause of worry for our energy consumers,” he said in a post on X.

India has diversified its oil import sources in recent years, particularly since 2022 when Western sanctions were imposed on Russia following its invasion of Ukraine.

Government sources said Russian crude accounted for about 20 per cent of India’s total imports in February, amounting to roughly 1.04 million barrels per day, a sharp rise from just 0.2 per cent in 2022.

Meanwhile, US Energy Secretary Chris Wright said the waiver allowing India to buy certain Russian cargoes is part of broader short-term measures to stabilise oil prices during the ongoing crisis.

He noted that large volumes of Russian oil currently stored in floating tankers could be brought quickly into the global market to ease supply pressures.

The developments come amid heightened tensions in West Asia following a joint US-Israel strike on Iran on February 28, which triggered retaliatory drone and missile attacks by Tehran across several Arab countries.