US Sanctions Set To Hit India’s Russian Crude Imports, Steep Short-Term Drop Expected
Key Takeaways
- India’s Russian crude imports expected to drop from 1.8M bpd to ~400,000 bpd
- Major refiners including Reliance halt Russian oil purchases
- No complete halt expected as discounted barrels remain attractive
- India to diversify sourcing from Middle East, Latin America, West Africa
India’s Russian crude oil imports are projected to decline sharply in the coming months as new US sanctions on Moscow’s top exporters take effect. While flows won’t stop completely, analysts predict a significant drop from current levels of 1.8-1.9 million barrels per day to around 400,000 bpd through December and January.
Sanctions Target Specific Russian Exporters
US sanctions imposed on November 21 target Rosneft, Lukoil and their subsidiaries, effectively turning their crude into “sanctioned molecules.” However, the restrictions apply to specific companies rather than all Russian oil, allowing non-designated producers to continue legal exports to India.
Major Refiners Suspend Russian Purchases
Leading Indian refiners including Reliance Industries, HPCL-Mittal Energy, and Mangalore Refinery have halted Russian crude imports following the sanctions. The sole exception is Rosneft-backed Nayara Energy, which remains heavily dependent on Russian supplies.
“Based on the current understanding, no Indian refiner, other than Nayara’s already-sanctioned Vadinar facility, is likely to take the risk of dealing with OFAC-designated entities,” said Sumit Ritolia, Lead Research Analyst at Kpler.
Reliance Adjusts Strategy for EU Compliance
Reliance Industries, the world’s largest buyer of seaborne Russian crude, confirmed it stopped importing Russian oil into its export-oriented SEZ refinery on November 20. From December 1, all exports from the Jamnagar SEZ unit will use exclusively non-Russian crude.
Diversification and Future Outlook
Indian refiners are expected to increase procurement from alternative sources including:
- Middle East (Saudi Arabia, Iraq, UAE, Kuwait)
- Latin America (Brazil, Guyana, Colombia, Argentina)
- West Africa and North America
Despite near-term disruptions, analysts don’t anticipate a complete halt to Russian imports. Discounted barrels remain economically attractive, and India’s energy policy prioritizes affordability and security over geopolitical pressure.
“Russian crude will keep flowing to India, though via increasingly diversified and less transparent channels,” Ritolia added.
Frequently Asked Questions
How much will India’s Russian oil imports decline?
Imports are expected to drop from current levels of 1.8-1.9 million barrels per day to around 400,000 bpd in the near term.
Which Indian companies have stopped buying Russian crude?
Reliance Industries, HPCL-Mittal Energy Ltd, and Mangalore Refinery and Petrochemicals Ltd have halted imports. Only Nayara Energy continues Russian crude purchases.
Is all Russian oil now banned for India?
No. The sanctions target specific companies like Rosneft and Lukoil. Oil from non-designated Russian producers can still be legally purchased.
Where will India source alternative oil supplies?
India will increase imports from Middle Eastern countries, Latin America, West Africa, and North America to replace reduced Russian volumes.
