Breather for India as US extends sanctions waiver for Russian oil already at sea

The extension by a month, which ensures Russian oil in transit can still be delivered, will reduce the risk of short-term supply shocks as there will be no immediate disruption in supply.

The United States has extended by a month a waiver from sanctions on Russian oil already at sea.

The US Department of the Treasury issued an order on Monday extending the waiver from sanctions on Russian oil stranded at sea on or before April 17 through June 17.

This gives more time for these shipments to reach buyers, including India, at a time when global oil markets have remained uncertain amid the US war on Iran.

"Effective May 18, 2026, General Licence No. 134B, which was dated April 17, 2026 and expired on May 16, 2026, is replaced and superseded in its entirety by this General License No. 134C," the order issued by the Office of Foreign Assets Control of the Department of the Treasury said.

Earlier, the US had granted an exemption from sanctions to India for buying Russian oil for a month beginning March 5. A few days later, a similar waiver was extended to several other countries, which ended on April 11.

The general licence exempting India and other countries from sanctions on the purchase of Russian oil at sea was extended by a month on April 17.

The general licence issued by the US on Monday does not authorise any transaction involving a person, entity or joint venture located in Iran, North Korea, Cuba, or parts of Ukraine.

"This extension will provide additional flexibility, and we will work with these nations to provide specific licences as needed," US Treasury Secretary Scott Bessent said in a social media post on X on Monday. "This general ⁠licence will help ‌stabilise the physical crude market and ensure oil reaches the most energy-vulnerable countries."

Bessent said the measure would help reroute existing supply to countries most in need, ‌allowing them to compete with China for previously sanctioned oil.

What does this mean for India

India is the top consumer of ​Russian seaborne crude, and its ​purchases have been near record highs in April and May following previous sanctions ​waivers.

The US extension of waiver from sanctions, which ensures that Russian oil in transit can still be delivered, will reduce the risk of short-term supply shocks as there will be no immediate disruption in supply.

The development comes at a time when global crude oil prices are rising sharply because of the ongoing West Asia conflict.

The Strait of Hormuz, the world's most critical oil chokepoint, remains under disruption due to the Iran war. This has led to tanker movements slowing down and resulted in insurance costs increasing.

India is the top consumer of ​Russian seaborne crude. According to reports, since the war began, India has been sourcing oil from Russia (about 45%), Saudi Arabia, Iran, Venezuela, Brazil, Angola, the US, Canada, and other countries.

In view of higher prices, reduced production, and increased transportation costs, oil companies in India are incurring losses of Rs 1,000 crore per day, according to the Minister for Petroleum and Natural Gas.