Washington’s decision to cease sanctions waivers for Russian and Iranian oil imports has created a substantial hurdle for India's energy security. US Treasury Secretary Scott Bessent confirmed on April 15 that the waivers, which had allowed India to continue importing crude from these nations under specific conditions, would not be renewed. The general license for Russian cargoes loaded before March 12 has already expired, while the separate waiver for Iranian oil is set to lapse on April 19.
Impact on India's Crude Oil Sources
This policy shift comes at a critical time for India, whose reliance on discounted Russian crude had recently deepened. Data from vessel-tracking firm Kpler indicates that India’s Russian crude imports surged to a nine-month high of nearly 1.96 million barrels per day (mbpd) in March 2026, a 53% increase from February. This spike was largely concentrated during the waiver period and occurred as geopolitical tensions in West Asia disrupted traditional Middle Eastern supply lines, with Iraqi crude imports plummeting by nearly 75% by late March.
Russian crude has been a stabilizing factor in India’s energy basket, accounting for approximately 35.9% of total crude imports in 2023-24 and 35.8% in 2024-25. The impending April 19 deadline means India must now find alternative sources for almost 2 mbpd of crude supply across new geographies, contracts, and shipping routes. This transition is expected to incur higher costs due to longer-haul cargoes, increased freight rates, and tighter tanker availability.
India's Diversification Strategy
In response to these challenges, India's government has consistently emphasized diversification of its crude oil sources. Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, noted that Oil Marketing Companies (OMCs) have already diversified energy imports to over 40 countries. India's contingency plan focuses on suppliers outside the Gulf region and beyond the Strait of Hormuz chokepoint.
New Geographic Focus for Crude Oil Supply
- Latin America: Countries like Brazil, Colombia, and Ecuador are becoming increasingly vital suppliers. Guyana, rapidly emerging as a significant oil exporter, is projected to produce around 1.1 mbpd in 2026, making it a key prospect.
- West Africa: Stable volumes from nations such as Nigeria and Angola are expected to offer Indian refiners viable alternatives to Gulf grades.
- United States: Indian OMCs are also likely to boost purchases from the United States, where shale-linked crude provides both scale and reliability.
While none of these options can perfectly substitute the discounted Russian barrels, their collective flexibility may help India mitigate the impact of the expired sanctions waivers, albeit at a potentially higher price point for its crude oil sources.