Major Indian refiners are set to see Russian oil deliveries drop to near zero after the US sanctioned Russia’s two largest oil companies Rosneft and Lukoil on Oct. 23, Bloomberg wrote.
These sanctions target the entire production chains of both Russian oil giants. For state-linked Rosneft, this includes major refineries like Ryazan Oil Refinery and field developers such as Samaraneftegaz.
Lukoil, the largest privately owned Russian oil company, also faces restrictions on key units, including Lukoil West Siberia and Lukoil Kaliningradmorneft, which handle onshore and offshore oil and gas development.
The latest restrictions announced by Washington would make further Russian oil imports to India nearly impossible, executives at several refineries told Bloomberg on condition of anonymity.
So far this year, India sourced just over 36% of its crude imports from Russia, according to analytics company Kpler. Historically, India relied more on Middle Eastern oil.
India’s imports of Russian oil surged in 2022, after Russia launched its full-scale invasion of Ukraine and the Group of Seven set a $60-per-barrel price cap on Russian crude to limit Kremlin revenues while keeping global oil supplies flowing.
India avoided US-sanctioned crude from Iran and Venezuela. Russian shipments, however, were allowed and cheaper, leading to a rapid increase in purchases. The latest US sanctions target Moscow’s largest oil producers, ending most trade just as refiners return after Diwali, a major Hindu festival of lights in October-November, Bloomberg wrote.
A possible exception is Indian refiner Nayara Energy, backed by Rosneft. It operates exclusively on Russian crude following EU sanctions in July.
Spot negotiations for Urals crude, Russia’s main medium-sour export oil, have slowed since mid-October, after US President Donald Trump said Indian Prime Minister Narendra Modi promised to halt Russian purchases, the media outlet wrote.
“With this sanctions move, the Indian refiners may have to pull back way faster,” Vandana Hari, founder of Singapore-based market analysis firm Vanda Insights, said. “It’ll probably be relatively easier for India, which was not buying any Russian crude until three years ago, compared to China.”
India is the largest buyer of seaborne Russian crude, but the US sanctions have also sent ripples through China’s oil industry.
“This is definitely one of the more meaningful measures the US has taken, but I think it will be blunted by the widespread use of illicit financial networks,” Rachel Ziemba, analyst at the Center for a New American Security in Washington, said. “So it really comes down to whether China and India are afraid of further escalation in secondary sanctions.”
The Trump administration’s messaging confirms it views the latest sanctions against Russia as a starting point, not an end.
Secretary Bessent stressed that the Treasury “is prepared to take further action if necessary to support President Trump’s effort to end yet another war.”
He added a direct challenge to allies: “We encourage our allies to join us in and adhere to these sanctions.” The full power of these new measures will depend heavily on global compliance.
