Why the US Says India Can Buy Russian Oil Again
Less than a month after India agreed to stop buying Russian oil in exchange for a US trade deal, Washington says it can buy it again.
Less than a month after India agreed to stop buying Russian oil in exchange for a US trade deal, Washington says it can buy it again. Good news for India, Russia or both?The Trump administration's decision to ease sanctions on Russian oil sales to India in order to address potential supply issues has raised questions about Washington's resolve on the issue.
When President Trump and Indian Prime Minister Narendra Modi announced a trade agreement last month, a major component of the deal was India agreeing to stop purchasing Russian oil. Trump had repeatedly criticized India's purchases of the hydrocarbon from Moscow.
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However, in a major policy shift, the US announced on Thursday (March 5) a 30-day waiver to allow Indian refiners to buy Russian oil again.
"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," US Treasury Secretary Scott Bessent said on social media.
Why has the US made this policy shift?
Global oil prices have surged in the wake of the US and Israeli attacks on Iran, with supplies drying up via the strategically vital Strait of Hormuz and with oil production disrupted across the region.
Given India's status as the world's third-largest crude importer, the US says it is trying to alleviate supply and price pressures by allowing it to resume purchases of Russian oil already available on the global market.
The temporary license given to Indian refiners covers Russian crude oil and petroleum products already loaded onto vessels before March 5, so long as they are delivered to India and purchased by an Indian company.
"The US government is simply looking for quick fixes to the global oil price issue," Ben Hilgenstock, a specialist on sanctions against Russia with the Kyiv School of Economics, told DW. "The Russian oil that is already floating around is obviously a prime candidate for that."
Bessent added in his statement that the "temporary" measure would help India without significantly boosting the Kremlin. "This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorizes transactions involving oil already stranded at sea," he said.
Is this a big deal for India?
Before the Russian invasion of Ukraine in 2022, India was not a significant buyer of Russian oil. However, it ramped up purchases when Russian oil became much cheaper on international markets than the alternatives.
However, New Delhi agreed to pull back from those purchases earlier this year amid sustained pressure from the Trump administration. Hilgenstock says that decision was made easier by the fact that, at the time, global oil prices were low and India could still source relatively cheap options other than from Russia.
"The Trump administration was able to do this because the oil market was in a very different situation," says Hilgenstock. "And they will be able to do this again after the Iran issue is over, whenever that may be, because the oil market fundamentally is still in a very different situation."
However, the move is likely to provide relief for Indian refiners. India is vulnerable to supply shocks and price hikes. Its crude stocks typically cover less than a month of demand, with refineries also holding limited inventories of other petroleum products.
"It's a saving grace for Indian refineries," Carole Nakhle, CEO of UK-based energy consultancy Crystol Energy, told DW. "It's not that they have reduced their purchases to zero, but they were looking for other sources of supply. It helps Indian buyers who were buying Russian oil."
Although India's oil minister Hardeep Singh Puri said this week the country was well-stocked despite "short-term disruptions arising from the Middle East", around half of the country's crude imports come through the Strait of Hormuz.
Indian refiners and the government had been considering a range of emergency measures to deal with possible supply shortages. Russia had already directed more cargoes towards Indian waters in anticipation of a possible reprieve.
Hilgenstock says the move is likely to lower prices and that it might as well be Indian buyers benefiting from that, given its importance as a crude import market.
"Everyone is having issues with supplies coming from Saudi Arabia, the UAE, Kuwait and Iraq. Someone would have bought this oil anyway. And if it decreases the global price a little bit, then why not?"
Has India really stopped purchasing Russian oil?
Since the US dropped tariffs on India in return for the country to stop buying Russian oil in early February, Indian refiners had reduced purchases from Russia by around half from the peak in June 2025. A continuing decline in purchases was expected before the US and Israeli bombing of Iran began.
India replaced that oil with purchases from the Middle East, especially from Kuwait, Qatar, Saudi Arabia and the United Arab Emirates.
Will the reprieve help Russia?
If the 30-day reprieve is not extended, it's unlikely to make much material difference for Russia, analysts say.
Both Hilgenstock and Nakhle say that other countries, such as China or others in Asia, would have likely purchased the oil anyway, and that now it is simply headed for India instead.
"The ultimate question is how long this is going to take," says Hilgenstock. "If it's a month or two, it's fine. It gives Russia some breathing space, but it doesn't solve any of the fundamental issues that they have."
Russia's energy revenues fell by around 20% in 2024 as low oil prices and increasing sanctions, particularly from the US on Russian oil majors Rosneft and Lukoil, took their toll. The sanctions have meant an ever widening discount on Russian oil on global markets for the countries that do purchase it.
Hilgenstock says that before the Iran attacks began, the situation for Russian oil was bleak, with its benchmark selling for as low as $30 a barrel. "That's very, very bad," he said.
While Russia may benefit temporarily from supply and price shocks caused by the conflict in the Middle East, he expects market fundamentals to be restored as soon as the current conflict ends — particularly if sanctions remain in place.
However, Hilgenstock said it was also important to remember that the appetite for sanctions — from the US or otherwise — was only going to be as strong as market conditions would allow.
"Every time there is trouble in the market, they go back on their promises and loosen restrictions — that argument can certainly be made," he said.
Edited by: Andreas Becker
(The above story first appeared on LatestLY on Mar 06, 2026 09:00 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).