India’s reliance on discounted Russian crude is facing a critical turning point as temporary diplomatic breathing room disappears. Following a massive surge in imports during March 2026, the Indian energy sector is now bracing for renewed pressure as the United States ends key sanctions waivers that had facilitated the flow of “stranded” Russian oil.
The March Rebound
In a dramatic shift, India’s imports of Russian fossil fuels more than tripled in March 2026, reaching a staggering €5.8 billion. According to data from the Centre for Research on Energy and Clean Air (CREA), crude oil accounted for 91% of these purchases. This spike saw Russia’s share of India’s total oil imports jump from 20.4% in February to nearly 47% in March, approaching record peaks.
This resurgence was largely driven by a 30-day US Treasury waiver issued on March 5, which allowed Indian refiners to process cargoes that were already at sea or stuck on previously sanctioned vessels. State-owned refiners, which had paused purchases late last year due to payment and shipping hurdles, led the charge with a 148% month-on-month increase in intake.
The Closing Window
The landscape shifted abruptly this week. US Treasury Secretary Scott Bessent confirmed that the general licenses—intended only to clear oil already in transit—would not be renewed. The waiver for Russian oil officially expired on April 11, 2026, signaling a return to “full sanctions enforcement.”
New Delhi now faces a dual challenge:
Logistical Risks: Ukrainian drone strikes on Russian Baltic ports like Ust-Luga have disrupted infrastructure, threatening May delivery schedules.
Secondary Sanctions: With the waiver gone, Indian firms continuing to trade above the G7 price cap risk losing access to international banking, insurance, and shipping networks.
Diversification as a Shield
Despite the tightening noose, the Indian government maintains a pragmatic stance. Officials highlight that India now sources crude from 40 different countries, up from 27 a decade ago. While Russia remains a primary supplier, private refiners like Reliance Industries have already begun signaling a transition toward US and Middle Eastern alternatives to mitigate geopolitical exposure.
As the “adjustment window” closes, India must navigate a volatile market where energy security and diplomatic alignment are increasingly at odds.
