NEW DELHI: The extension of the US sanctions waiver allowing India to purchase Russian oil plays a key role in ensuring the short-term ene...
NEW DELHI: The extension of the US sanctions waiver allowing India to purchase Russian oil plays a key role in ensuring the short-term energy security of the South Asian republic amid supply disruptions from the Middle East, Indian global trade expert Dhriti Mukherjee Pipil told TASS.
"With disruptions in the Strait of Hormuz and a sharp decline in Middle Eastern supplies, Russian crude is no longer just a cost advantage. It is filling an active supply gap. In the short run, the waiver helps prevent a supply constrained situation from escalating into a broader energy crisis," the expert noted.
In her opinion, if the period of sanctions relief on Russian oil had not been extended, Indian refining companies would have faced operational difficulties related to payment, insurance, and logistics for already shipped oil cargoes. "Overall, the waiver helped avoid a situation where supply substitution would have been possible, but significantly more costly and operationally complex," she explained.
The expert recalled that in recent months, oil imports from Russia have increased again, returning Russia to the list of top suppliers. "This [the significance of Russian supplies] is not purely price-driven. With a significant share of India's crude routed through the Strait of Hormuz, Russian crude also provides a geographic hedge against regional supply risks," she indicated. Mukherjee Pipil believes that, under current geopolitical and logistical conditions, rapid supply diversification remains difficult.
Speaking about the impact of the US extension of sanctions relief on Russian oil on the global energy market, the expert pointed out that it contributes to price stabilization and prevents a sharp reduction in supply. "The waiver has a stabilizing effect on global oil markets. By allowing the continued flow of Russian barrels, it prevents a sudden supply contraction that would otherwise push prices higher. It also reinforces the eastward diversion of Russian crude toward Asian markets, sustaining a segmented global oil trade system," the analyst concluded.
On Friday, the US allowed until May 16 the conduct of operations for the sale, transportation, and unloading of crude oil and petroleum products of Russian origin loaded onto tankers before April 17.
-News Feed
COMMENTS