What Happened
- India has affirmed it will continue buying Russian crude oil even as a 30-day US sanctions exemption granted in early March 2026 nears its April 11, 2026 expiry.
- The US Treasury's OFAC issued a temporary license authorising delivery of Russian crude loaded on vessels as of March 5, 2026, valid through April 3, 2026; India is now operating beyond this window.
- India has rejected the notion that it needs US permission to buy Russian oil, citing its sovereign right to make independent energy decisions.
- Indian refiners have sharply increased Russian crude purchases in recent months amid a supply crunch caused by West Asia conflict and Strait of Hormuz disruptions.
- Russia remains India's largest crude oil supplier, accounting for approximately 30% of India's total crude imports as of early 2026.
Static Topic Bridges
India's Energy Security: Crude Oil Import Dependence
India is the world's third-largest consumer and importer of crude oil. With domestic production meeting less than 13% of total demand, India's crude oil import dependence stood at approximately 87.8% in 2023-24. This structural vulnerability means that any disruption to global supply chains — whether from sanctions, geopolitical conflict, or chokepoint closures — directly impacts India's economy and energy costs.
- India imports approximately 5 million barrels per day (mbpd) of crude oil.
- Major suppliers include Russia (~30%), Iraq (~20%), Saudi Arabia (~16%), UAE, and the United States.
- India's Strategic Petroleum Reserves (SPR) cover only about 9.5 days of crude requirement at full capacity — far below the IEA's recommended 90 days.
- SPR facilities: underground caverns at Visakhapatnam (Andhra Pradesh), Mangaluru and Padur (Karnataka), managed by Indian Strategic Petroleum Reserve Limited (ISPRL).
- India has given in-principle approval for new SPR facilities at Chandikhol (4 MMT) and Padur (2.5 MMT) to expand total capacity to 11.83 MMT (~21.5 days).
Connection to this news: India's decision to continue Russian crude purchases — even at the cost of potential sanctions friction with the US — reflects the depth of its energy import dependence and the limited alternatives available amid the West Asia supply crunch.
US Secondary Sanctions and OFAC
The Office of Foreign Assets Control (OFAC), a division of the US Treasury Department, administers economic and trade sanctions. OFAC's secondary sanctions allow the US to penalise non-US entities (including Indian banks and oil companies) for transactions with sanctioned countries like Russia. Following Russia's invasion of Ukraine in 2022, the US imposed sweeping sanctions under Executive Orders and Congressional mandates.
- The G7 introduced a price cap of $60 per barrel on Russian crude in December 2022 to limit Russia's oil revenues while maintaining global supply.
- Countries like India are not legally bound by US unilateral sanctions, but their banks and companies face practical risks through correspondent banking relationships.
- OFAC can issue specific licenses (waivers) authorising otherwise prohibited transactions on a case-by-case basis.
- The March 2026 temporary waiver was explicitly framed as "short-term" to keep global oil markets stable amid the Iran-war supply disruption.
Connection to this news: The waiver mechanism and its expiry illustrate how US secondary sanctions create leverage over third countries like India, even when those countries reject the legal premise of US authority over their sovereign trade decisions.
India's Strategic Autonomy in Energy Diplomacy
India's approach to Russian oil post-2022 Ukraine war is a textbook example of strategic autonomy — prioritising national economic interest over alignment with Western sanctions regimes, while carefully managing bilateral relations with both sides. India negotiated discounted Russian crude (reportedly $10-20 per barrel below market price) while simultaneously engaging with the US, EU, and Gulf producers.
- Russian crude never left India's import mix from 2024 to 2026, consistently making up about one-third of total imports.
- India does not recognise the G7 price cap as a binding obligation.
- India's position: it is not a party to the sanctions; its companies comply with domestic law.
- Indian refiners (IOC, HPCL, BPCL, Reliance) process Russian Urals and ESPO blend crude extensively.
Connection to this news: India's public affirmation of continuing Russian oil purchases — even as a US waiver expires — is a diplomatic signal of strategic autonomy and reflects India's leverage as the world's third-largest oil importer.
Strait of Hormuz and Global Oil Supply Chain
The 2026 West Asia conflict, involving US-Israel military action against Iran, triggered Iran's use of the Strait of Hormuz as a pressure tool, effectively halting or severely disrupting shipping through this critical chokepoint. This created an acute global oil supply crunch that made Russia's discounted crude even more attractive to India.
- About 20-21 million barrels per day of crude transits the Strait of Hormuz — roughly 20% of global petroleum liquids.
- The 2026 Hormuz disruption is described as the largest global oil supply shock in history, three times larger than the 1973 Arab oil embargo (Rapidan Energy Group estimate).
- India imports approximately 40% of its crude from Gulf producers transiting the Strait — all of which faced disruption.
- Russia supplies crude via Arctic and Baltic routes, entirely bypassing the Strait, making it strategically resilient during the 2026 crisis.
Connection to this news: The West Asia conflict that created the supply crunch is precisely why India has "splurged" on Russian crude — and why it expects the US waiver arrangement to be extended or rendered moot by geopolitical reality.
Key Facts & Data
- India's crude oil import dependence: ~87.8% (2023-24).
- Russia's share of India's crude imports: ~30% (early 2026).
- US sanctions 30-day waiver: covered Russian crude loaded on or before March 5, 2026.
- India's SPR capacity: 5.33 MMT (covers ~9.5 days); currently ~64% full.
- G7 Russian oil price cap: $60/barrel (in force since December 5, 2022).
- Indian state refiners: Indian Oil Corporation (IOC), Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL).