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US looks to end waiver on Russian oil purchase, says Rubio: Here's how it will hit India
The US first announced the waiver in March. Since then, it has been extended twice, with the latest extension set to expire on June 17.
The United States is looking to end its waiver that has allowed the purchase of Russian oil, US Secretary of State Marco Rubio said on Tuesday.
India is among the key countries that have benefited from the US waiver, as it allowed New Delhi to resume its purchase of Russian oil.
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US looks to end ‘time-limited’ waiver
Rubio, appearing for a US Congress hearing, stated that the current waiver on Russian oil was "time-limited" and established in order to ease the disruption caused by the blockade of the Strait of Hormuz amid the ongoing conflict between the US-Israel and Iran.
"We would like to end it as soon as we possibly can because the underlying policy of this country has been to sanction their oil. These are time-limited waivers for the purpose of opening up more global supply," Rubio told the Committee.
The US first announced the waiver in March. Since then, the waiver has been extended twice, with the latest extension set to expire on June 17.
When asked by Democrat ranking member Jeanne Shaheen regarding the waiver, Rubio stated that the final decision to call it off will be made by the Treasury Department.
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Shaheen further sought a commitment from Rubio on whether the waiver will be extended again or not, adding that it has benefited Russia, despite the US's claim.
When the waiver was first announced, the US stated that sanctions on Russian oil, which is already seaborne, would be lifted, adding that its purchase would not be financially advantageous to Moscow.
However, as oil prices remain volatile, Rubio stated that the waiver remains in place to alleviate the global impact of the surge.
"The problem we're facing, too, is there's a contagion potential, and that is that at some point we can do strategic reserves, we can do some of the other things that we've done to alleviate global supply, but at some point you have to ensure -- this is not so much for us," he told the Senate Foreign Policy Committee.
India to be impacted?
India had been asked to stop its purchase of Russian oil after US President Donald Trump added an additional 25% tariff, accusing the US ally of “fuelling Putin's war in Ukraine".
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On several occasions, Trump has also claimed that Prime Minister Narendra Modi had “assured him” that India would stop its purchase of Russian oil. While no comment was made from the Indian leader, this commitment was later added to the bilateral trade agreement between New Delhi and Washington.
A fact sheet issued by the White House elaborated that India had agreed to halt its oil and crude purchases from Russia.
“President Trump agreed to remove the additional 25% tariff on imports from India in recognition of India’s commitment to stop purchasing Russian Federation oil. Accordingly, the President signed an Executive Order last Friday removing that additional 25% tariff,” said the White House document.
By moving India away from Russian oil, the US pushed towards Venezuela, especially since the US's military raid, which captured the sitting president, Nicolas Maduro.
However, with the war between the US, Israel, and Iran breaking out on February 28, global oil and gas supply took a hit as Tehran blocked the Strait of Hormuz, which is a vital passage for around 20 per cent of the world's oil and gas supply and 40 per cent for South Asia.
The US waiver on Russian oil allowed India to resume its purchase since its Gulf route was impacted. However, the US has continued to push towards Venezuelan oil, and this is expected to be amplified with interim president Delcy Rodriguez's visit this week.
