India to End Russian Oil Purchases as US Sanctions Take Effect
India is ending its significant imports of discounted Russian crude oil as US sanctions against Russian oil giants Rosneft and Lukoil take effect on November 21. Indian refiners are completing existing shipments before the deadline and preparing to comply with new rules to avoid penalties, marking a major shift after three years of buying Russian crude at discounted rates. Complexities remain for companies like Nayara Energy.
India has been a major buyer of discounted Russian oil for the past three years, but this buying spree is now concluding due to impending US sanctions targeting Russian oil companies Rosneft and Lukoil, effective November 21. Indian refiners have accelerated existing shipments to ensure deliveries before sanctions start, causing a short-term spike in imports, but shipments dropped by 66% in November compared to prior months. These sanctions cover around 3 million barrels per day, with India historically receiving about a third of that volume. Following the sanctions, Indian companies are adjusting their procurement strategies to avoid penalties, including reducing exposure to sanctioned suppliers and employing more complex logistics such as ship-to-ship transfers and use of unsanctioned traders. Nayara Energy faces additional complications due to its ownership structure. This shift represents India’s pivot away from Russian crude, which may also lead to increased imports of US petroleum crude and liquefied petroleum gas as part of deeper long-term energy cooperation between India and the US. Overall, India is preparing for a noticeable reduction in Russian crude imports in the coming months, aligning with new international trade and sanction regimes.
