The US Treasury Department has extended a temporary authorization allowing countries to purchase Russian crude cargoes already in transit, Treasury Secretary Scott Bessent said on X. The measure applies only to oil already at sea and is intended as a short-term step to expand available supply in global markets amid heightened geopolitical tensions.

The authorization covers shipments loaded before 12 March, broadening a waiver previously granted to India that allowed buyers to receive cargoes loaded before 5 March, Bloomberg reports. The decision allows purchasers to complete deliveries of crude already in transit without extending the exemption to new shipments.

Market context: The move comes as governments monitor energy market volatility linked to tensions in the Middle East and risks to global supply routes. Brent crude was trading near USD 100 per barrel in early Asia trading, reflecting continued uncertainty in oil markets.

Why it matters: India’s purchases of Russian crude in March have witnessed a 50% uptick to 1.5 mn bbl/ d as refiners secure alternative feedstock. Diversifying supply is only a short-term hedge against geopolitical shocks impacting Gulf imports as Russian crude flows can partially offset disruptions.

Bypassing Hormuz not enough

Rerouting oil imports: Indian refiners have stepped up crude imports through Saudi Arabia’s Red Sea port of Yanbu and the UAE's Fujairah route to bypass Strait of Hormuz, Moneycontrol reports, citing shipping and commodity tracking data. Both locations are linked to pipelines that allow crude exports to bypass the Hormuz Strait.

Shipment volumes:

  • Yanbu, Saudi Arabia: Shipments to India reached about 8.8 million barrels (mn bbl) so far this month, after previously being minimal. Another 4.2 mn bbl are scheduled for April.
  • Fujairah, UAE: Shipments totaled about 4.3 mn bbl so far this month.

Sound smart: Saudi Aramco operates the East-West pipeline, which can transport about 5 mn bbl / d from eastern oil fields to Yanbu on the Red Sea. The Abu Dhabi National Oil Company (ADNOC) operates the Habshan-Fujairah pipeline, capable of moving about 1.5 mn bbl / d from Abu Dhabi’s oil fields to the Gulf of Oman.

Capacity constraints: The pipeline capacity cannot fully replace the 2.5-2.7 mn bbl/day India previously imported through the Strait of Hormuz — imports from the Gulf are estimated at only one-third of normal levels, even with the rerouting, according to the report.

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