With the US issuing a universal sanctions waiver on Russian oil purchases amid the oil supply constraints due to the West Asia conflict, the price of Russia’s flagship crude grade Urals hit a record high for deliveries at India’s west coast, with the discount on this oil relative to international benchmark Brent crude contracting to the lowest in four months. Washington had earlier granted a one-month waiver exclusively to India for buying US-sanctioned Russian crude already in tankers on sea; India’s Russian oil imports have surged this month as maritime traffic through the critical chokepoint of the Strait of Hormuz effectively came to a halt, hitting energy supplies from West Asia.
Then last week, the US extended the waiver to all countries, which was bound to increase competition for Russian barrels already on the high seas. According to oil price assessment data global service provider Argus Media, the delivered-at-port price for Urals crude on India’s west coast was $98.93 a barrel on Friday, the highest since India stepped up imports of Moscow’s crude in 2022 after Russia’s invasion of Ukraine. This price is for month-ahead deliveries, and includes shipping costs. The discount to dated Brent was down at just $4.8 per barrel, the lowest since November 12. Discounts on Russian oil had widened significantly from November following US sanctions on Russian oil majors Rosneft and Lukoil, which had reduced the appetite for their oil.
Till a few days back, millions of barrels of Russian crude were languishing on the high seas with few willing buyers. Now, they are in high demand with the disruption in vessel movement through the Strait of Hormuz—the narrow waterway that connects the Persian Gulf with the Gulf of Oman—and accounts for one-fifth of global oil and liquefied natural gas (LNG) flows. Around 2.5–2.7 million bpd of India’s crude imports—accounting for around half of the country’s total oil imports—have transited the Strait of Hormuz in recent months; the longer-term average is around 40%. This oil is mainly from Iraq, Saudi Arabia, the UAE, and Kuwait.
Along with higher sales in volume terms, the spurt in global oil prices—particularly Russia’s own crude grades—is also helping Russia boost its oil revenue, making Moscow a direct beneficiary of the war in West Asia. According to a recent Financial Times report, Moscow is estimated to have earned around $150 million a day in extra oil revenue since the effective closure of the Strait of Hormuz.
According to trade sources, Indian refiners are estimated to have bought over 40 million barrels of Russian crude—predominantly Urals—so far this month, leading to a jump in prices. The initial US waiver to India allowed Indian refiners to buy Russian crude loaded on tankers before March 5, for deliveries up to April 4, without risking attracting secondary sanctions. The universal waiver issued last week allowed for deliveries up to April 12.
In the first 11 days of the month, India imported 1.5 million barrels per day (bpd) of Russian oil, up around 50% from February levels, as per ship tracking data from commodity market analytics firm Kpler. These volumes are expected to rise further as the regular West Asian oil volumes through the Strait remain highly constrained. Around 130 million barrels of Russian crude was estimated to be on ships on water as of early March. Some of those volumes would have already been gobbled up by India and China, the biggest buyers of seaborne Russian crude. Additional volumes are likely to have come on water over the past couple of weeks as well. With the US now keen on getting the global supply gap bridged partly by Russian oil, the offtake of Moscow’s crude is expected to accelerate further.
All this means that Russia could rake in billions of dollars more due to the West Asia conflict. And the longer the West Asian oil flows remain heavily constricted, the better it would be for Moscow, whose Budget deficit has been expanding due to high expenditure on the Ukraine war even as the Russian economy is slowing down.
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India had, in recent months, cut down significantly on its oil imports from its largest oil supplier Russia amid trade negotiations with the US, as Washington made it a pre-requisite for scrapping its 25% additional penal tariff on New Delhi. In February, India had imported just over 1 million bpd of Russian crude, almost half of the 2025 peak of over 2 million bpd. Loadings of Russian crude for Indian ports, which averaged 1.7 million bpd last year, was just 0.7 million bpd in February. India is the world’s third-largest consumer of crude oil and depends on imports to meet over 88% of its oil requirement.
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