Indian refiners de-risked in advance, Trump's Russia sanctions waiver a ‘temporary’ relief: Experts

The United States gave India temporary relief from tariffs of up to 100% that could have followed India’s purchases of Russian oil. The waiver matters because it prevents an immediate financial shock, but it does not remove the underlying sanctions law or the risk of renewed pressure.

The Graham Act remains in force, and its secondary sanctions have only been deferred. Washington can therefore review the waiver and potentially revive the tariff threat. The United States is also monitoring India’s Russian energy purchases, keeping the issue active.

This uncertainty affects both India’s energy planning and trade negotiations. India has already reduced Russian imports and bought costlier supplies from other regions. Experts say the waiver buys time, not lasting certainty, so India should protect energy security and avoid treating temporary tariff relief as a permanent trade concession.

India’s Russian crude purchases have fallen by roughly one-third from their July peak. Imports dropped from around 2.7 million barrels a day to about 1.8 million barrels a day, according to industry executives and experts cited in the article.

Russian oil was a negligible part of India’s crude imports until 2021-22. After Western sanctions hit Moscow, Russia offered steep discounts, and its share rose sharply. By 2025-26, Russian crude represented nearly one-third of India’s crude imports.

The decline reflects refiners reducing their exposure before US penalties were enforced. The article also reports that Russia’s share fell from 51% in July to 44% in August as India bought more US and UAE crude. The shift has reduced sanctions risk but increased India’s costs because replacement oil is more expensive.

Indian refiners reduced Russian purchases before the new sanctions were enforced because they expected uncertainty around Washington’s policy. The Graham Act was still moving through Congress, but companies anticipated that geopolitical conditions and the approaching US midterm elections could complicate enforcement.

Rather than wait for tariffs or sanctions to take effect, refiners began lowering their exposure. They also increased purchases from the United States and other suppliers. This was a risk-management decision, designed to keep crude supplies available if Russian trade suddenly became harder or more expensive.

The strategy had an immediate cost. Russian imports fell from about 2.7 million barrels a day at the July peak to around 1.8 million. India replaced some of that crude with costlier supplies, while experts warned that the sanctions threat remains. The waiver therefore confirms the value of early preparation but does not eliminate future pressure.

Indian refiners are replacing Russian crude with oil from several regions rather than relying on one new supplier. The article identifies the United States, West Africa, South America, and traditional West Asian suppliers as the main alternatives.

The shift is visible in India’s buying pattern. The article says Russia’s share fell from 51% in July to 44% in August while India bought more crude from the United States and the UAE. These purchases helped refiners reduce their exposure to possible US penalties linked to Russian oil.

Diversification supports continuity when one source becomes risky or unavailable. However, the replacement barrels cost more, partly because freight and insurance charges are higher. India is therefore trading some sanctions exposure for greater import costs. The US waiver may slow further changes, but experts say the law still leaves Washington able to renew pressure.

Replacing Russian crude raised India’s oil bill because the discounted barrels were replaced by more expensive supplies. The article links the higher cost to costlier crude, increased freight and insurance charges, and volatile global oil prices.

The September figures show the imbalance clearly. India’s crude import bill climbed from $11.7 billion in August to $15.4 billion in September, a 31.6% increase. Import volume rose from 19 million tonnes to 21.7 million tonnes, or only 14.21%. The Indian basket’s average price also rose 28.71%.

The pressure was not limited to supplier changes. Global prices surged amid worsening geopolitical tensions and disruption to shipping through the Strait of Hormuz. Over April-September 2026-27, India’s crude import bill rose 46.4% to $90.6 billion. More expensive sourcing therefore combined with a tougher global market.

Secondary sanctions extend US pressure beyond companies directly covered by American restrictions. They can threaten third parties that continue certain dealings with a sanctioned country, even when those parties are not participants in the underlying conflict. This gives Washington influence over international energy trade.

In this case, the Graham Act threatens major energy importers such as India and China because they buy Russian energy. The article says the law could trigger tariffs of up to 100% against India. Refiners responded by cutting Russian purchases and seeking crude from the US, West Africa, South America, and West Asia.

The risk remains because the sanctions were deferred, not cancelled. The US Trade Representative continues monitoring Russian energy purchases, and Washington can use the tariff threat in trade negotiations. India must therefore balance cheaper Russian crude against possible commercial penalties and disruption to its wider US relationship.

Crude oil is naturally occurring, unrefined petroleum pumped from underground or beneath the seabed. It contains a mixture of hydrocarbons and other substances. Refineries process it into usable products such as petrol, diesel, jet fuel, and other petroleum products.

Refiners buy from multiple international suppliers because crude varies by characteristics such as density and sulfur content. Refineries are designed to process certain grades, so a change in supply may require operational adjustments. Suppliers also differ in price, shipping distance, insurance cost, and reliability. In this article, discounted Russian crude was replaced by oil from several regions.

Using multiple sources can protect a country from shortages or sudden disruption. India’s refiners increased purchases from the US, the UAE, West Africa, South America, and other West Asian suppliers. That diversification reduced exposure to Russian sanctions risk, but it also raised costs because replacement crude and transport were more expensive.