India’s oil refiners are poised to manage supply disruptions following the expiration of the US waiver on Russian crude purchases. This resilience is attributed to weaker demand and the availability of crude from the US and the Middle East.
Traders have noted that China’s reduced presence in the market has been crucial for maintaining spot supply. Domestic demand in India has also slowed due to maintenance activities that have decreased overall purchases from private refiners.
Despite the constraints, offers of prompt-loading crude from the US, the United Arab Emirates, Oman, and Iraq have continued to surface. However, total Middle Eastern supplies remain significantly below pre-war levels. Traders spoke on the condition of anonymity as they are not authorized to comment publicly.
Discounted Russian oil has been a significant part of India’s import strategy since 2022, following the onset of sanctions due to the Ukraine invasion, which disrupted traditional markets. Although there was a temporary decrease in Russian oil volumes last year under US pressure, Indian refiners have resumed buying shipments from Moscow with enthusiasm.
According to Kpler data, flows are projected to approximate 1.9 million barrels per day in May, nearing peak levels. This figure includes a timeframe covered by the recently expired US waiver, despite appeals from Indian officials and the Brent price currently being over 50% higher than pre-war levels.
“We have been purchasing from Russia before, during the waiver, and now,” stated Sujata Sharma, joint secretary in the oil ministry, during a press briefing. She emphasized that oil marketing companies opt for purchases based on financial viability.
Maintenance at Reliance Industries Ltd and Nayara Energy Ltd has led to an increase in the volume of Russian crude stored on vessels, now exceeding 7 million barrels globally—an increase fivefold from the previous month, according to ship-tracking reports from Bloomberg.
For Indian refiners, this situation provides ample options in the short term, given that the end of the US waiver is not expected to drastically reduce Russian oil flows to India.
“Limited alternatives are available at comparable scales and pricing, especially in a market fraught with geopolitical instability and uneven Middle Eastern supplies,” commented Sumit Ritolia, modeling and refining manager at Kpler Ltd. “India is unlikely to drastically reduce its reliance on Russian crude in the immediate future.”
Some Indian refiners also remain hopeful for a potential extension of the US waiver, despite its expiration, as noted by sources familiar with the situation who requested anonymity due to its sensitive nature. US Treasury Secretary Scott Bessent indicated in April that the waiver would not be renewed, although a new permit was issued shortly thereafter.
India retains approximately 60 days of crude oil and liquefied natural gas reserves, alongside 45 days of liquefied petroleum gas stockpiles, according to Oil Minister Hardeep Puri.
“We have not had any difficulty in securing the crudes we need,” remarked Vikas Kaushal, Chairman of Hindustan Petroleum Corp, during a recent analyst briefing. “Naturally, I would prefer they were arriving at $30 less than their current prices, but that’s a different matter,” he added, noting that HPCL continues to import crude from Russia, Africa, the US, and Venezuela.
