Indian Refiners Buy Russian Oil at Sea After US 30-Day Waiver, Seek Legal Clarity on Sanctioned Entities
The US Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 133, granting a 30-day waiver (effective March 5 to April 4, 2026) permitting Indian entities to purchase, receive, and offload Russian-origin crude oil and petroleum products already loaded on vessels before the waiver date.
Indian refiners immediately began purchasing millions of barrels of Russian oil floating in Asian waters after the waiver — capitalising on potentially discounted cargoes stranded at sea due to earlier sanctions uncertainty.
However, Indian refiners have so far confined purchases to non-sanctioned Russian oil cargoes, as the OFAC license does not unambiguously clarify whether the waiver permits import of oil from specifically sanctioned Russian entities (such as Lukoil and Rosneft, sanctioned by the US in November 2024).
Indian refiners are seeking formal legal opinions on whether the General License 133 also covers purchases from sanctioned Russian companies — a significant compliance risk question.
The waiver applies only to cargoes already at sea before March 5, 2026 — it is not a broad relaxation of Russia oil sanctions or a green light for new contracts.
US Treasury Secretary Scott Bessent framed the waiver as a "limited stop-gap" to allow oil already in transit to reach market, preventing a global energy shock, while expecting India to increase American energy purchases longer term.
US Sanctions Architecture: OFAC, Secondary Sanctions, and General Licenses
The US Treasury Department's Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions based on US foreign policy and national security goals. Understanding how OFAC sanctions work is critical to understanding India's navigating of Russia oil trade.
Indian refiners' legal caution about whether GL 133 covers sanctioned Russian companies reflects the real-world complexity of navigating US sanctions: even a 30-day waiver still requires careful legal interpretation when "sanctioned entities" are involved.
India-Russia Oil Trade: Strategic and Economic Context
Since Russia's invasion of Ukraine in February 2022 and the subsequent Western sanctions, India dramatically increased purchases of discounted Russian crude. By 2024-25, Russia had become India's largest crude oil supplier — a complete reversal from its near-zero share pre-2022.
The US 30-day waiver is a direct outcome of the West Asia crisis — Washington needs India to access alternative oil supply (Russian stranded cargoes) to prevent a global price spike, temporarily overriding its own sanctions pressure on India's Russia oil trade.
India's Energy Diversification Strategy: A Three-Source Model
India's response to the current energy crisis reveals its evolving energy procurement strategy — one that deliberately avoids over-dependence on any single region or supplier, while remaining flexible enough to exploit price advantages wherever available.
The Indian refiners' rush to snap up Russian oil cargoes under the OFAC waiver exemplifies India's pragmatic, interest-driven energy policy — using every available window (Russian discount, US waiver, US LPG diversion) to secure supply security during an acute crisis.
- OFAC General License 133: issued for Russian oil stranded at sea, valid March 5 – April 4, 2026 (30 days)
- Scope: cargoes loaded on or before 12:01 AM EST March 5, 2026; delivered to Indian ports; purchaser must be Indian entity
- Sanctioned Russian companies (Nov 2024): Lukoil, Rosneft (among others)
- Russian share of India's crude imports: rose from <1% (early 2022) to ~35-40% (FY2025)
- India's crude reserves: approximately 25 days of demand
- US Treasury framing: "limited stop-gap" — expects India to increase US energy purchases long-term
- Indian refiners' position: purchasing only non-sanctioned Russian cargoes pending legal clarity on GL 133 scope