The United States has urged India to absorb over 100 million barrels of Russian crude oil currently floating offshore, awaiting delivery to Chinese refineries.

This proposal comes amid spiking global oil prices triggered by the escalating Iran conflict, which has disrupted vital shipping routes in the Middle East. US Energy Secretary Chris Wright made the direct appeal during television interviews on CNN and CBS News, highlighting a pragmatic, short-term tactic to stabilise rattled energy markets.

Wright revealed that he and Treasury Secretary Scott Bessent personally contacted Indian officials. They pointed to the backlog of Russian oil idling at sea, queued for Chinese unloading slots that could take up to six weeks.

Redirecting these cargoes to Indian refineries, the US argued, would swiftly alleviate fears of shortages, curb price surges, and prevent market panic without altering underlying supply realities.

India, the world's third-largest oil importer, relies heavily on discounted Russian crude since Moscow's invasion of Ukraine in 2022. New Delhi has already ramped up purchases from Russia, sidestepping Western sanctions to secure affordable energy for its booming economy.

In 2025 alone, Russian oil accounted for nearly 40 per cent of India's seaborne imports, helping refineries like those operated by Reliance Industries and Indian Oil Corporation process vast volumes efficiently.

The timing of the US overture aligns with acute disruptions in the Strait of Hormuz, through which about 20 per cent of global oil flows. The Iran conflict has slashed tanker traffic to well below normal levels, though some resumption has occurred. Wright noted that full recovery might take weeks, not months, but the interim volatility has injected a 'fear premium' into prices, pushing Brent crude above $85 per barrel in recent trading.

This floating Russian oil—equivalent to roughly two weeks of China's imports—stems from Moscow's pivot to Asia after European buyers shunned its exports. Chinese independent refiners, known as 'teapots', have been primary takers, but port congestion and scheduling delays have left dozens of supertankers adrift in the Pacific and Indian Oceans. Satellite tracking data from firms like Vortexa confirms over 110 million barrels in limbo as of early March 2026.

For India, the proposal offers immediate benefits. Its state-run refineries, including Jamnagar and Paradip, possess spare capacity and longstanding experience handling Urals-grade Russian crude. Absorbing these cargoes could save New Delhi millions in spot market purchases while undercutting the price spike. Analysts estimate it might shave $2-3 off benchmark prices per barrel if executed promptly.

India's payment mechanisms for Russian oil, routed through rupee-rouble trades and UAE-based intermediaries, must scale up quickly. Additionally, while US policy towards Russia remains unchanged—enforcing G7 price caps at $60 per barrel—this nudge tacitly acknowledges the limits of sanctions enforcement when allies like India prioritise energy security.

Wright emphasised that global supplies remain ample, with OPEC+ quotas and US shale output providing buffers. The world is 'very well supplied' with both oil and natural gas, he insisted, dismissing notions of structural shortages.

Recent International Energy Agency reports corroborate this, projecting a 1.2 million barrels-per-day surplus into mid-2026, barring further Middle East escalations.

Geopolitically, the move underscores shifting alliances under the Trump administration. While publicly critical of India's Russian ties, Washington now seeks New Delhi's help to contain Iran-linked volatility—a nod to the Quad partnership's strategic depth. It also signals pragmatism: the US imported record volumes of Venezuelan oil last year despite sanctions rhetoric, prioritising market stability.

India's response remains pending, but precedents exist. In late 2024, New Delhi snapped up delayed Russian cargoes during Red Sea disruptions, boosting stocks ahead of winter demand. Commerce Minister Piyush Goyal has hinted at flexibility, stating that 'energy affordability trumps ideology' in turbulent times.

Should India proceed, it could redirect up to 10-15 Very Large Crude Carriers (VLCCs) from China-bound routes, easing offshore queues and signalling to markets that supply chains are resilient. This would not only cool prices but reinforce India's role as a swing absorber in global oil trade.

Longer-term, the episode highlights vulnerabilities in chokepoint-dependent flows. India is accelerating refinery expansions and biofuel mandates under its Net Zero 2070 pledge, but for now, Russian oil remains a lifeline. As Hormuz tensions simmer, this US-India coordination exemplifies realpolitik in action.

IANS