US waiver gives India a 60-day review, but freight is already cutting Russian oil

The US has waived the penalties that could have added up to 100% to Indian goods from 18 October⁶. Oil minister Hardeep Singh Puri told an industry event on 27 October that he "never felt anything" when asked about US pressure to cut Russian crude imports⁷. But the reprieve carries a clock, and the force already cutting India's Russian crude intake is freight, not sanctions.

What the order does, and what it does not

President Donald Trump signed Executive Order 14436 on 16 October¹. It waives the duties in sections 112 and 113 of the Lindsey O. Graham Sanctioning Russia and Iran Act¹. Those sections carry the 500% duty on Russian goods and the 100% duty on goods from the five largest buyers of Russian crude and gas^1, 6.

The waiver covers "any duties" under those sections, not duties on crude alone, so refined products and LNG fall inside it too¹. The order was signed two days before the 18 October date it sets for the 100% duty on new Russian purchases¹. Platts reported it came days before the measures were due to take effect³.

The 60-day figure in circulation is not written into the order. Section 4(d) keeps the waivers in force until the President or the Secretary of State "determine that further action is appropriate"¹. Rubio said Washington had begun a 60-day review and would use it to decide whether to impose tariffs². A period of that length starting in mid-October would run out in mid-December.

Industry voices agree. "As of now, it is a sixty-day pause only," said DLN Sastri, a former director of oil refining and marketing at the Federation of Indian Petroleum Industry³.

Two things the waiver does not do. It does not repeal the Act. Nor does it touch the separate 10% levy Indian exports pay under Section 301, the rate Delhi says it will not go above in the trade talks⁵.

Freight, not sanctions, is moving the barrels

Russian crude discharges into India peaked at 2.43 million barrels a day in June³. They fell to 2.05 million in July, 1.98 million in August and 1.64 million in September, according to S&P Global Commodities at Sea data³. Russia's share of the import basket slipped to 33.5% from 46.6%⁸. Middle East crude rose to about 2.8 million b/d, or 54% of imports⁸.

BPCL said Russian volumes would fall again in November because higher freight costs made Middle East grades more commercially viable⁴. The premium on Russian crude narrowed to about $1 to $2 a barrel for December cargoes, from $12 to $13 a barrel in October⁴.

The freight numbers explain the switch. Goldman Sachs puts the global average crude freight rate above $20 a barrel, against $3 a year earlier, including a $7 a barrel war risk premium for crossing Hormuz⁹. The VLCC rate for the Persian Gulf to West Coast India route was $95.83 a metric tonne on 19 October, against $19.15 before the conflict¹⁰.

Sanctions relief may also cut the wrong way. It could draw shadow-fleet tankers into Hormuz shuttle work, which analysts say would lift rates on Russian exports even as the legal risk falls¹⁰.

What it costs Indian buyers

PPAC puts the Indian crude basket at $121.25 a barrel in October, against $65.08 a year earlier¹¹. The crude import bill for April to September rose 46.3% to $90.6 billion¹¹.

Average regional diesel benchmarks reached $151 a barrel and petrol $120 in the six months to September, and India's fuel export earnings rose nearly 50% in rupee terms¹². The rupee, at 95.18 to the dollar on 26 October, adds to the bill¹³.

Retail pump prices have moved once. They rose a cumulative 7.5% in May, and Oxford Economics called November "the last realistic window" for another increase before state election campaigning intensifies¹⁴. On the freight side, US diesel at $6.276 a gallon has pushed carriers to re-rate fuel surcharges weekly rather than monthly^15, 16.

What to watch

The review comes first. A 60-day period from mid-October points to a decision in mid-December, and the US mid-term elections in November sit inside it^2, 10. Then the direction of December cargo premiums⁴.

The trade deal is unsigned, and Delhi says an 18% rate is not acceptable while it pays 10%⁵. Rubio used his 20 October visit to Jamnagar to push Venezuelan and US crude as alternatives¹⁷.

ET also reported that India plans to buy Russian LNG under long-term contracts⁷. No contract has been announced, so treat that as reported rather than settled.

Finally, the freight benchmark behind these contracts is itself contested. Mercuria is asking a London court to rule that the Baltic Exchange should have suspended its TD3C tanker rate¹⁸.