New Delhi, Mar 6 (PTI) Indian refiners have begun snapping up millions of barrels of Russian oil floating in Asian waters after the US granted a waiver allowing purchase of cargoes stranded at sea, but are seeking legal opinion on whether the exemption also permits buying from sanctioned entities, sources said.

The US has issued a 30-day waiver allowing India to buy Russian oil currently stuck at sea in an effort to keep global supplies flowing and temper further price increases.

Indian refiners have snapped up some 20 million barrels of Russian oil, mostly from non-sanctioned entities, they said, adding that the companies are seeking legal opinion if the waiver permits purchase of oil from even sanctioned entities.

They started buying Russian oil even before the US waiver came in as supplies from the Middle East were disrupted.

India had emerged as the largest buyer of Russian seaborne crude after Moscow's 2022 invasion of Ukraine, but its refiners began scaling back purchases in January amid pressure from Washington.

The reduction helped New Delhi avoid a proposed 25 per cent tariff on its exports and clinch an interim trade deal with the United States.

A top oil ministry official said New Delhi never completely stopped buying oil from Russia as part of its policy to source energy needs from diversified sources. At February end, before the US and Israel attacked Iran to trigger a wider conflict in the region, India bought some 1.04 million barrels per day of Russian oil.

This was lowest since November 2022 and half of peak 2.15 million barrels a day hit in May 2023.

The purchases, the official said, were from entities not sanctioned by the US.

As the widening West Asia conflict led to blockage of the crucial oil and gas transit route through the Strait of Hormuz and energy prices sources, the US gave a waiver to allow purchase from Russia.

The US Treasury's Office of Foreign Assets Control (OFAC) has issued a licence allowing the delivery, sale and offloading of Russian-origin crude oil or petroleum products that were loaded on vessels before March 5, 2026, to buyers in India.

The licence authorises transactions related to the sale, delivery, and offloading of such cargoes at Indian ports until April 4, 2026, provided the purchaser is an entity organised under Indian law.

While the order says the licence is valid for buying crude available at sea, including on sanctioned vessels, it does not explicitly state if purchases can be made from sanctioned entities, another ministry official said.

The refiners will seek legal opinion if such purchases are allowed, the official said.

Sources said Indian refiners have stepped up purchases of Russian oil floating around.

About 15 million barrels of Russian crude are currently floating on tankers in the Arabian Sea and the Bay of Bengal, while vessels carrying another 7 million barrels are idling near Singapore, cargoes that can reach Indian refiners within days. Additional tankers loaded with Russian oil are in the Mediterranean Sea and near the Suez Canal and could arrive at Indian ports within a month.

Sources said Hindustan Petroleum Corporation Ltd (HPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL), which hadn't purchased Russian oil since December, are back in the market. Reliance Industries Ltd, too, is seeking Russian oil deliveries.

With the widening West Asia conflict blocking shipments through the Strait of Hormuz and raising concerns over oil and LNG supplies from the Middle East, Indian refiners are balancing purchases from both Russian cargoes at sea and other sources to ensure an uninterrupted domestic fuel supply.

"President Trump's energy agenda has resulted in oil and gas production reaching the highest levels ever recorded," US Treasury Secretary Scott Bessent said.

"To enable oil to keep flowing into the global market, the Treasury Department is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil." Calling the move a stopgap measure, he said Washington expects India to eventually buy more US oil.

"India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of US oil. This stop-gap measure will alleviate pressure caused by Iran's attempt to take global energy hostage," Bessent said in a post on X.

The short-term measure will not provide significant financial benefit to the Russian government as it only authorised transactions involving oil already stranded at sea, he added.

India, which has inventories to cover for 25 days of demand for crude (raw material for making fuels like petrol and diesel), sources 40-50 per cent of its crude oil needs from the Middle East through the Strait of Hormuz. The escalating conflict in West Asia has effectively shut the strait.

Sources said Indian refiners are now buying the Russian oil to build inventories.

There are more than a dozen tankers with Russian oil in the Arabian Sea and the Bay of Bengal, sources said, adding that another eight vessels are idling off Singapore and could reach India within days. Beyond that, ships laden with Russian oil are also in the Mediterranean Sea and the Suez Canal and these will also reach India in under a month.

"With nearly 50 per cent of India's crude imports transiting the Strait of Hormuz, the country remains highly exposed to potential supply disruptions," said Sumit Ritolia, an analyst at the data intelligence firm Kpler.

"The US waiver allowing additional purchases of Russian crude over base load offers short-term relief, though competition from Chinese buyers for the same barrels could limit the extent of India's benefit." Indian refiners had already been importing around 1 million barrels per day of Russian crude in recent months, meaning the waiver effectively acts as a green signal to lift volumes above this base load, he said.

"As of early March, around 130 million barrels of Russian crude remain on the water, including significant volumes across the Indian Ocean, Red Sea/Suez routes, and around Singapore, which could potentially be redirected toward Indian ports if commercial deals are finalised.

"With the waiver now in place, refiners could quickly resume purchases, potentially pushing Russian inflows around 1.6-2 million barrels per day in the near-term," he said.

While this provides a short-term logistical buffer, it cannot fully offset India's 2.6 million barrels per day exposure to Middle Eastern crude, and competition from Chinese buyers for the same Russian barrels will limit the upside.

"For Indian refiners, renewed access to Russian crude would support feedstock security and margins. However, there has been no official indication of product export curbs from the Indian government. In the near term, refiners are likely to prioritise domestic fuel availability and comfortable stock levels, meaning the increase in crude availability may not immediately translate into higher product exports. Export flows would likely rise only once domestic requirements are satisfied," he said. PTI ANZ TRB