US Ends Russian Oil Import Exemption for India, Potentially Costing Russia Billions

The United States has signaled a significant tightening of its sanctions regime against Russia by ending the exemption that allowed India to import Russian oil. This decision, which follows a period where India dramatically increased its purchases of Russian crude, could cost Moscow billions in lost export revenue and marks a notable shift in US policy.

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India bought a record 2.25 million barrels of oil from Russia daily in March, almost double the amount from February.

Following the initial easing of sanctions on Russian oil carried by tankers in March, Washington had extended a grace period through April. This extension primarily benefited India, which, alongside China, had become a major recipient of Russian oil. During this period, India's imports of Russian crude reached record levels, nearly doubling from February to March, with Russian oil constituting up to 50% of its total oil imports, according to Reuters.

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the share of Russian oil in India's imports jumped to 50%.

India had reportedly approached the US seeking a further extension of this exemption, aiming to sustain its imports and, by extension, its financial support for Russia's war effort. However, the US Treasury Secretary Scott Bessent has indicated that the general license permitting the purchase of sanctioned Russian oil stored on tankers will not be renewed. This decision underscores the US commitment to maximizing pressure on Russia's economy, even as global energy markets remain volatile. The impact on global oil prices and India's energy security remains to be seen.

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India turned to the US with a request to extend the permit to purchase sanctioned Russian oil.