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Indian refiners de-risked in advance, Trump's Russia sanctions waiver a ‘temporary’ relief: Experts
Refiners began de-risking themselves in advance, even as Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act (Graham Act) on September 18.
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Washington’s decision to hold off tariffs of up to 100% that a new US sanctions law would have triggered against India for buying Russian oil offers only temporary relief, people familiar with the matter said, as Indian refiners have already cut their Russian purchases and are paying more for the oil that replaced them.
Imports of discounted Russian crude have fallen by a third since July, industry executives said, and India’s crude import bill rose 31.6% in September from August even though volumes grew only 14.2%, according to the petroleum ministry’s Petroleum Planning and Analysis Cell (PPAC).
Refiners began reducing their exposure while the bill was still moving through Congress, before US President Donald Trump signed the Lindsey O Graham Sanctioning Russia and Iran Act (Graham Act) into law on September 18, company executives and industry experts said on condition of anonymity. They expected geopolitical conditions and the approaching US midterm elections to make it difficult for Washington to enforce the act from October 18, but stepped up imports from the US and other suppliers anyway.
Imports of Russian crude have dropped to about 1.8 million barrels a day from around 2.7 million at the July peak, they said.
Russian oil made up a negligible share of India’s crude imports until 2021-22. Its share rose to nearly a third in 2025-26, as Moscow, hit by Western sanctions, offered steep discounts.
Refiners have replaced it with crude from the US, West Africa, South America and traditional West Asian suppliers, which costs more, partly because of higher freight and insurance charges, they said.
In absolute terms, the import bill rose 31.6% in just one month to $15.4 billion in September from $11.7 billion in August, while volumes rose to 21.7 million tonnes from 19 million tonnes (a 14.21% increase), PPAC data show. [In this period, the average crude oil price of the Indian basket increased by 28.71% from $90.19 per barrel in August 2026 to $116.09 per barrel in September 2026].
Over April-September 2026-27, the crude import bill rose 46.4% to $90.6 billion, a period that also captured the surge in global oil prices after shipping through the Strait of Hormuz was disrupted.
Experts attributed the higher bill to volatile global oil prices, driven by worsening geopolitical tensions, and to the threat the Graham Act posed to major energy importers such as India and China. That threat remains because the act’s secondary sanctions have only been deferred, they said, leaving Trump free to use the law against these countries whenever he chooses.
The experts said the waiver offers no long-term assurance either for India’s energy security or for its trade talks with the US, in which New Delhi is seeking a comparative tariff advantage for Indian goods over competing countries. Commerce and industry minister Piyush Goyal said on Thursday that the first tranche of the trade agreement would be put into operation once India secured a “competitive advantage” over its peers.
Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), a New Delhi-based trade think tank, said the US Trade Representative’s continued monitoring of Russian energy purchases would allow “Washington to review the waiver and retain the tariff threat as leverage in future negotiations”.
“Under its October 9 agreement with Russia, the US decided to buy Russian diesel to ease domestic shortages and high fuel prices. Punishing other countries for buying Russian energy while doing so itself would invite accusations of double standards. Washington had also agreed not to raise tariffs on China until January 10 under a deal reached during President Xi Jinping’s US visit last month. With US spared, and China shielded, targeting India alone could derail ongoing bilateral trade negotiations,” he said.
The message was clear, Srivastava said: US interests determined when penalties applied. “For India, the waiver buys time but offers no lasting certainty. Russia’s share of Indian oil imports fell from 51% in July to 44% in August as India bought more from the US, despite higher prices, and from the UAE. Yet SRIA [the Sanctioning Russia and Iran Act] remains law, leaving Washington free to revive the tariff threat to extract concessions in bilateral trade talks,” he said.
“India should protect its energy security, buy oil on commercial terms and prepare for renewed US pressure. Temporary tariff relief is no basis for permanent trade concessions,” he added.
