Even as the world economy grapples with the global oil supply shock, the Donald Trump administration has reportedly made it clear to European countries that any relaxation on Russian crude oil sanctions will be linked to supplies to India. On Monday, President Donald Trump hinted that Washington might consider lifting ‘some oil-related sanctions’ to help lower prices. However, he did not elaborate on the proposal, except to say that the matter had come up during a phone conversation with Russian President Vladimir Putin earlier that day. According to a Bloomberg report, the United States has informed its European partners that any additional relaxation of sanctions on Russian crude will be largely limited to shipments destined for India. Oil prices have been climbing since the start of the US-Israel-Iran war. The message comes at a time when India has increased purchases of Russian crude as supplies from the Middle East are halted due to the closure of the Strait of Hormuz.
India buys Russian crude oil
The US claims it has provided exemption to India to receive Russian oil cargoes already in transit. India, on its part, has said that it has never stopped buying Russian crude oil and does not need anyone’s ‘permission’ to take decisions related to its energy security.India continues to buy crude oil from Russia and has not stopped such imports, despite US President Donald Trump’s commitment to remove the proposed 25 per cent penalty tariff as part of a potential trade deal with New Delhi reportedly ceasing purchases of Russian crude.Officials told TOI that India has never required approval from any country to buy oil from Russia, noting that Moscow remained the country’s largest supplier of crude in February. He emphasized that India’s decisions regarding energy procurement are guided by the principle of “national interest”. “We source crude from where supply is available, competitively priced and deliverable and we will continue to do so,” a government source said, according to a TOI report.Sources also said that the “30-day waiver” announced by senior US officials allowing India to import Russian oil was primarily meant for their domestic audience.During a conference call held on Monday among finance ministers of the Group of Seven nations, the United States stressed that the decision related to India was strictly limited in both duration and scope, EU Economy Commissioner Valdis Dombrowski said.“He does not expect it to have a major impact on Russian oil revenues,” Dombrowski said at a press conference that evening after attending the G-7 discussions.People familiar with the deliberations said US officials stressed that any further sanction relief would follow the same narrow and carefully defined approach. He also said that the final decision ultimately depends on Trump.Meanwhile, oil production cuts are intensifying across the Middle East as activity in the strategically important Strait of Hormuz has ground to a halt. Due to the disruption, crude oil prices reached near $120 per barrel on Monday.Trump said the same day that the United States and Israel were making meaningful progress in their military campaign against Iran and that the conflict could end “very soon”, a development that helped ease earlier gains in oil prices.Still, as hostilities continued, G-7 nations said Monday they were prepared to release oil from their strategic reserves if necessary. However, some member states believe the situation has not yet reached the threshold necessary for such a move, according to people familiar with the matter.
