India to Reassess Russian Oil Imports Following Expiration of US Waiver

India to Scale Down Russian Oil Imports as US Waiver Expiring

India is poised to reduce its purchases of Russian oil following the expiration of the US waiver on May 16. According to data from commodity analytics firm Kpler, India's imports of crude oil from Russia stood at 1.88 million barrels per day as of May 14, surpassing the 1.57 million barrels per day bought in April.

The country's oil imports from Russia are likely to scale down, settling modestly below the levels observed in March or closer to those seen in April, should the waiver not be extended. The absence of a waiver would reintroduce compliance and due diligence requirements for Indian refiners, naturally constraining the pace of purchases.

India had never stopped buying oil from Moscow, but the waiver allowed the country to purchase crude from sanctioned entities, including Lukoil and Rosneft. The waiver was issued by the US in mid-March and later renewed, but it is set to expire on May 16.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Meanwhile, India is increasing its oil purchases from the US, Venezuela, Oman, Brazil, and Angola in an attempt to diversify sourcing amid disruptions in supplies from the Middle East. The country imported 404,000 barrels per day of oil from the US as of May 14, surpassing the April import level of 101,000 barrels per day. Oil imports from Venezuela in the first 14 days of May stood at 393,000 barrels per day, also surpassing April levels of 283,000 barrels per day.

Crude oil imports from the West Asian countries have begun to improve in April, with preliminary data from Kpler indicating imports from Saudi Arabia at 256,000 barrels per day as of May 14 against 670,000 barrels per day in April. Oil imports from the UAE stood at 513,000 barrels per day during the half-month period, against 608,000 barrels per day last month.

External Affairs Minister S Jaishankar on May 14 called the unilateral non-United Nations' sanctions unjustified, stating that such measures disproportionately affect developing countries. The international crude prices have significantly surged post the start of conflict on February 28, with Brent crude prices trading at $107.7 per barrel on Friday.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The oil ministry had earlier stated that India has secured sufficient crude supplies with all cargoes tied up and refineries running at peak capacity, addressing concerns over the then expiry of US waiver on April 6.