• Source:JND

Amid growing uncertainty in global energy markets, the United States has indicated that it may soon end the sanctions waiver that allows countries such as India to buy Russian oil. The exemption, if withdrawn, can have significant implications for India's energy security and fuel costs. So far, the waiver has enabled India to access discounted crude supplies from Russia despite Western sanctions linked to the Ukraine conflict.

US Signals End to Russian Oil Waiver

US Secretary of State Marco Rubio on Tuesday, told the Senate Foreign Policy Committee that Washington wants to end these waivers "as soon as possible." He said the exemptions were introduced temporarily to help stabilise global oil supplies and control rising energy prices during periods of conflict. According to Rubio, the waivers were never meant to be permanent.

“We would like to end it as soon as we possibly can because the underlying policy of this country has been to sanction their oil. These are time-limited waivers for the purpose of opening up more global supply,” Rubio said. While the US economy may not depend heavily on these measures, several other countries have benefited from access to Russian oil under the waiver system.

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“The problem we're facing, too, is there's a contagion potential, and that is that at some point we can do strategic reserves, we can do some of the other things that we've done to alleviate global supply, but at some point you have to ensure this is not so much for us,” he added. The US first granted a waiver on Russian oil purchases in March and later extended it twice. The latest extension was approved on May 17 for one month.

India relies on imports for nearly 90 per cent of its oil needs. After the conflict began, Moscow offered crude oil at discounted prices due to Western sanctions. This allowed India to secure cheaper supplies and reduce its import costs. According to energy intelligence firm Kpler, India imported 2.3 million barrels of Russian crude oil per day last month. The sanctions waivers largely facilitated these purchases

What It Means For India?

Now, if the US ends the waiver, Indian refiners may find it harder to buy Russian oil. They would be forced to buy crude from other suppliers in the global market, where prices are generally higher. This can increase India's oil import bill and put pressure on domestic fuel prices. Higher energy costs can further affect inflation and increase expenses for businesses and consumers.

Many analysts believe that India's purchases of discounted Russian oil have helped shield the country from major energy shocks, especially during recent tensions in the Middle East and disruptions to the Strait of Hormuz, a vital waterway. However, the Indian government has repeatedly defended its right to buy oil from any supplier that best meets the country's economic needs.

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