Comprehensive sanctions announced by the US earlier this month on Russian oil trade have already affected short-term supplies of Russian crude to Indian refiners, with They are finding it difficult to secure sufficient cargo. The situation is forcing Indian refiners to look elsewhere, primarily to the Middle East, to replace supplies from Russia, currently India’s largest source market for crude oil.
India’s second-largest public sector refiner Bharat Petroleum (BPCL) will not have access to enough Russian crude for March delivery, Vetsa Ramakrishna Gupta, director (finance), said in an interview on Thursday. said in a phone call with List. Officials from other Indian refiners have also said that recent sanctions have made it difficult to supply Russian crude since February, as the tanker fleets transporting Russian crude appear to have been crippled. He said that
However, industry officials argue that there is sufficient oil supply on the world market and that it will not be difficult to replace lost Russian oil volumes.
“Oil availability is not the issue… only the commercial benefits of (discounted) Russian crude may not be available,” said Mr. Gupta, calling supply disruptions from Russia a “temporary phenomenon.” He added that there is a high possibility that this could be alleviated through some kind of rebalancing. of the market.
He said the share of Russian crude in BPCL’s import basket could plummet to 20% in March from 31% in the December quarter.
On January 10, the United States imposed sanctions on two major Russian oil companies (Gazprom Neft and Surgutneftegaz), and also imposed sanctions on so-called “shadow” companies that have continued to send Russian oil to major consumers such as India and China. It sanctioned 183 tankers, a significant portion of its “fleet.” It is involved in Russia’s oil sector and trade, including insurance companies.
The sanctions were announced by the outgoing U.S. administration of President Joe Biden at a time when Indian refiners were beginning to seek Russian crude oil cargoes for March delivery.
These sanctions are the latest in a list of measures taken by Western countries to curb Russia’s oil export revenues, which they claim are helping Russia finance the war in Ukraine. There is. According to the U.S. Treasury Department, the move significantly increases the risk of sanctions associated with Russian oil transactions. A large number of licensed vessels currently transport oil to India and China.
Indian refiners are now turning to traditional suppliers, mainly in West Asia, to increase crude purchases and address the shortage of Russian crude, industry and trade sources said. They are looking to increase supply under long-term contracts, apart from seeking additional cargo on the spot market from suppliers in the Middle East. They are also thought to be entering the market for more oil from Africa and the United States.
Russia, which was a minor oil supplier to India before the Ukraine war, is now India’s largest oil supplier, thanks to Moscow offering oil at a deep discount after Western countries started shunning Russian oil. It is a supplier country. Russian oil accounted for nearly 38% of India’s total oil imports in 2024, according to tanker-by-tanker data.
Before the Russo-Ukrainian war, Iraq, Saudi Arabia and the UAE were India’s top three crude oil supply markets. Both companies currently occupy the second, third and fourth positions respectively in the list of India’s top oil suppliers. India is the world’s third largest consumer of crude oil and relies on imports for more than 85% of its needs.
Indian refiners will refuse deliveries of crude oil by sanctioned vessels, except for cargoes booked before January 10, according to Indian government officials, and those vessels can only be used to deliver crude oil. The deadline is March 12th. This reduction period is set by the government. The US will be able to fulfill existing contracts for Russian oil.
India itself, like many other countries, is not part of the sanctions regime against Russia, but New Delhi has generally taken a policy of not violating U.S. sanctions, fearing secondary sanctions. India-Russia oil trade is unlikely to be severely affected during this period of contraction, but beyond that, industry observers expect oil supplies from Russia to India to take a hit in the near future. There is.
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