The end of US sanctions is near

A second 30-day waiver to purchase additional Russian oil beyond the baseload quantities allowed by the Donald Trump administration is set to expire on May 16. Russian oil has played the biggest role in ensuring supplies to India amid the disruption in West Asian supplies due to the Iran war. India has taken its purchases of Russian crude oil to its highest level ever this month.

After prices fell by about 15 per cent in March and April compared with February levels, two senior refining executives said India now needed to secure an extension of the discount to prevent a shortfall in crude supply.

Refiners have since plunged into commercial and strategic stocks, officials said. Private sector refiners Nayara Energy and Reliance Industries are shutting units for maintenance.

India’s growing dependence on Russian oil – the closest substitute in quality to shipments disrupted by the war – comes amid growing competition from neighboring China and other wealthy Asian countries for alternative crude grades from Latin America and Africa.

Shipping data shows that Russian oil shipments have surpassed the 2 million barrels per day (bpd) mark in two of the three months since the US and Israel attacked Iran on February 28.

Russian oil imports have surged 36 percent year-to-date to 2.3-2.4 million bpd, and are up 24 percent from a year earlier, according to calculations based on ship tracking data. The previous record was 2.16 million bpd in May 2023, according to industry data provider Kpler.

State refiner Indian Oil was the biggest buyer this month with a record 907,000 bpd, up 28 percent from a year earlier. Explaining the increase in purchases by state refiners, a senior trader at a refiner said the possible expiry of sanctions waiver on Russian oil was the biggest reason behind purchases of Ural grades.

Reliance Industries bought only 292,000 bpd, 300,000 bpd less than its average purchase in 2025, the data showed. New EU rules banning the use of Russian oil to make fuel, which is then exported to EU countries, has reduced Reliance’s appetite for Russian oil, industry officials said.

Russian oil is the closest replacement for West Asian grades, said Sumit Ritolia, a senior analyst at Kpler. “There are very few alternatives,” he said. Ritolia said the availability of Russian oil stored in the high seas has increased and India could aggressively buy more if the US extends discounts.

The medium, sour Ural variety, which provides better yields of diesel and jet fuel than grades from Africa and the US, is the closest alternative to Iraqi Basra and Saudi Arabian varieties, more than half of which were disrupted by the closure of the Strait of Hormuz, the official said.

While Urals no longer trades at a discount to Dated Brent on a delivery basis, as it did last year, the premium on the grade was only $3-4 a barrel, compared with more than $100 a barrel for West African and Brazilian varieties, on a delivery basis, another executive at a state refiner said.