US Sanctions Waiver Expiry on Russian Oil: Impact on India’s Energy Security

18 Apr 2026

The United States has allowed the sanctions waiver on Russian oil to expire and will not extend a similar waiver for Iranian oil.

The sanctions waiver for Russian crude was first issued specifically for India in the first week of March and was later extended to all other countries.

About Sanctions Waiver

Nature: The sanctions waiver was a temporary general license issued by the United States that permitted limited relaxation from existing sanctions.
Objective:
- To ease the global oil supply crunch
- To stabilize rising international crude oil prices
Russian Oil Provision: It allowed countries to import Russian crude oil that had already been loaded on tankers before a specified cut-off date.
Iranian Oil Provision: It also permitted the import of Iranian crude oil that had been loaded prior to a designated cut-off date.
Operational Flexibility: The waiver enabled transactions involving sanctioned entities, vessels, and insurers for a limited period.

Geopolitical Disruption: The ongoing conflict in West Asia disrupted key global oil supply routes.
Chokepoint Impact: This led to reduced movement through the Strait of Hormuz.
Strategic Importance: The Strait of Hormuz is a critical chokepoint through which around 20% of global oil trade passes.
Supply Constraint: As a result, the global oil market experienced a supply squeeze.
Inflated Prices: Consequently, international crude oil prices remained elevated.

Surge in Russian Oil Imports: For India, the Russian oil waiver allowed for a fast ramp-up of imports of Moscow’s oil amid the major disruption in supplies from West Asia.
- In February, India had imported just over 1 million barrels per day (bpd) of Russian crude, almost half of the 2025 peak of over 2 million bpd.
- Consequently, Russia’s share in India’s total crude imports increased to about 44%, making it the dominant supplier.
Access to Sanctioned Supply Chains: The waiver enabled Indian refiners to engage with previously restricted supply chains, including direct dealings with companies like Rosneft and Lukoil.
- It also allowed the use of sanctioned tankers, insurers, and logistics networks;
- For example, refiners could accept deliveries from vessels that would otherwise be barred under US sanctions.
Strategic Diversification: India utilised the waiver to diversify crude sourcing amid disruptions in West Asia, offsetting reduced flows due to instability in the Strait of Hormuz.
- It also secured discounted Russian crude, thereby reducing its overall import bill.
Limited Iranian Oil Resumption: The waiver allowed India to resume limited imports of Iranian crude oil after several years.
- However, the volumes remained relatively small compared to Russian imports.

Sanctions Risk: India faces the risk of secondary sanctions by the United States, requiring it to avoid dealings with sanctioned entities, vessels, and financial channels.
Energy Security Concerns: India imports around 88% of its crude oil needs, with limited large-scale alternatives available beyond West Asia and Russia.
Geopolitical Balancing: India must carefully manage its strategic ties between the United States (as a key partner) and Russia (as a major energy supplier).

Diversify Energy Sources: India should expand crude oil sourcing from regions such as Africa and Latin America to reduce overdependence on a few suppliers.
Strengthen Strategic Petroleum Reserves: India must enhance its strategic petroleum reserves to cushion against global supply disruptions and price shocks.
Accelerate Renewable Energy Transition: A faster shift towards renewable energy sources should be promoted to reduce long-term dependence on imported fossil fuels.
Diplomatic Balancing: India should continue pragmatic diplomacy to balance its strategic partnerships with major powers while avoiding sanctions-related risks and ensuring energy security.

Basis	Primary Sanctions	Secondary Sanctions
Applicability	Apply to US citizens, companies, and entities	Apply to non-US (foreign) entities as well
Jurisdiction	Direct US legal jurisdiction	Indirect/global reach via US financial system
Target	US persons prohibited from dealing with sanctioned countries/entities	Foreign companies/banks dealing with sanctioned entities
Objective	Restrict US involvement with targeted states	Force global compliance with US sanctions
Examples of action	US firms banned from trading with Iran	Indian/Chinese firms penalised for trading with Iran
Type of pressure	Legal restriction within US system	Economic coercion through access to USD, banking, markets
Main tools used	Trade bans, asset freezes (US entities)	Blocking USD access, sanctions lists, visa bans
Impact on third countries	Minimal direct impact	High impact on global trade and finance
Key risk for countries like India	Limited (only US firms affected)	Energy imports, banking transactions, shipping routes affected
Criticism	Limited extraterritorial reach	Seen as violation of sovereignty / economic coercion