India is expected to maintain Russian crude oil imports at close to current levels after US President Donald Trump waived sanctions and tariffs mandated by a new law targeting major buyers of Russian oil, analysts said.
Trump issued an executive order late on Friday waiving the "sanctions, restrictions, and duties" under the Lindsey O. Graham Sanctioning Russia and Iran Act, a day before the 30-day deadline for enforcement expired. He signed the law on September 18.
The law authorised tariffs of up to 100 per cent on goods from the five largest importers of Russian crude and gas, along with sanctions on Russia's shadow fleet of tankers. The waiver is not specific to India and could also benefit China, while allowing the administration to reconsider the decision later.
India is the world's largest importer of Russian seaborne crude, averaging 1.8 million barrels per day (bpd) this year, ahead of China at 1.2 million bpd, ship-tracking data showed. Italy, Turkey and the Netherlands completed the top five.
India imported about 1.82 million bpd of Russian crude in September, compared with China's 1.49 million bpd. Kpler expects India's imports to remain around 1.8-1.9 million bpd in October. However, volumes are below the mid-year highs of 2.6 million bpd in June and 2.57 million bpd in July.
With the waiver in place, Indian refiners are likely to continue purchasing Russian crude, analysts said.
Russian oil reshapes India's import mix
Russian crude became a bargain for Indian refiners after Moscow's invasion of Ukraine in February 2022 triggered Western sanctions and prompted many buyers to shun Russian oil. The European Union banned seaborne imports of Russian crude, while the G7 imposed a price cap designed to curb Moscow's oil revenues without disrupting global supplies.
As traditional buyers retreated, Russia redirected cargoes to Asia at steep discounts to benchmark Brent crude. Discounts on its Urals grade at times approached USD 40 a barrel in early 2023.
India capitalised on the opportunity, rapidly changing its crude sourcing. Russian oil accounted for around 2 per cent or less of India's imports before the war, but refiners increased purchases as discounted cargoes improved processing economics and helped contain the cost of imported energy.
Russia subsequently became India's largest crude supplier, at times accounting for around 40-50 per cent of the country's total imports.
The shift also created a lucrative export stream for Indian refiners, which processed Russian crude into fuels such as diesel for domestic consumption and overseas markets. Although purchases have fluctuated with prices, supply availability and geopolitical pressures, the rapid rise of Russian oil has fundamentally reshaped India's crude import mix, analysts said.
The discounts made Russian oil an attractive alternative to supplies from West Asia and other producers, analysts said, adding that Russia made up for volumes lost due to the Iran war disrupting supplies earlier this year.
In September 2026, the discount on Urals-grade crude relative to the global benchmark Brent averaged USD 23 per barrel, analysts said.
Earlier diesel waiver signalled softer enforcement
The latest sanctions waiver follows a Treasury decision on October 9 to allow the sale and import of Russian diesel into the global market, including the US, until April 7, 2027.
The diesel waiver made enforcement of the new law unlikely, analysts said.