India braces for energy uncertainty as U.S. sanctions waiver on Russian oil expires. With Iran tensions rising, and global crude supplies disrupted, New Delhi weighs ties with Washington against reliance on Moscow.
India’s energy security has entered a turbulent phase with the expiry of the U.S. sanctions waiver that allowed New Delhi to import Russian crude. The temporary reprieve, granted amid global shortages after Iran blocked the Strait of Hormuz, ended last week. Now, India awaits clarity from Washington on whether the waiver will be extended.
The waiver was crucial for India, the world’s third-largest oil importer, as it enabled refiners to resume Russian purchases despite earlier U.S. pressure. President Donald Trump had imposed a 25 percent punitive tariff in August last year, citing discounted Russian oil as funding Moscow’s war against Ukraine. This was in addition to an earlier 25 percent tariff on India’s trade surplus, bringing the total to 50 percent.
Tariffs And Waiver
The tariffs strained India-U.S. ties, which had grown steadily since 2000. However, the February 28 U.S.-Israel attack on Iran and Tehran’s decision to halt tanker passage through the Strait of Hormuz triggered a global oil shortage. To ease the crisis, Washington temporarily lifted sanctions on India, allowing Russian imports.
Indian refiners quickly reversed course, boosting Russian purchases. Energy trade dominated talks during Russian Deputy Prime Minister Dennis Manturov’s visit to New Delhi in early April, alongside cooperation in fertilizers, industry, and technology.
India imports 85 percent of its crude needs, half from West Asia. It is also the fourth-largest refiner and fifth-largest exporter of petroleum products. Daily consumption stands at 5.5 million barrels. With West Asian supplies disrupted, India leaned on Russia again, though at higher prices than in 2022, when discounted crude was available.
Trump later agreed to reduce tariffs to 18 percent after a trade deal, with India privately assuring Washington it would scale down Russian imports. Publicly, New Delhi insisted national interest would guide procurement decisions.
Despite the crisis, India managed to keep fuel supplies steady. Government statements highlighted diversified sourcing from 40 countries, with 70 percent of imports now routed outside the Strait of Hormuz compared to 55 percent earlier. This helped India avoid the sharp price hikes seen elsewhere in Asia.
Still, uncertainty looms. Pakistan-brokered U.S.-Iran talks collapsed, and Tehran has again closed the Strait in response to Israeli strikes on Lebanon. Trump announced U.S. Navy patrols to stop ships entering or leaving the strait, raising fears of further disruption.
Diplomatic Efforts
India expects an extension of the waiver. Foreign Secretary Vikram Misri visited Washington between April 8-10, meeting U.S. Secretary of State Marco Rubio and other officials to review bilateral ties. Meanwhile, Petroleum Minister Hardeep Puri traveled to Qatar to discuss resuming LNG supplies, which accounted for over 40 percent of India’s imports from Qatar in 2024-25.
Reports suggest Qatari exports may not restart until August, leaving India reliant on Russia. Moscow appears ready to fill the gap, reinforcing its role as India’s trusted energy partner.