India to Slash Russian Oil Imports After New U.S. Sanctions Target Rosneft and Lukoil

RoydadNaft – Indian refiners are poised to sharply curtail imports of Russian oil, industry sources said on Thursday, following new U.S. sanctions on two major Russian producers aimed at squeezing Moscow’s revenue to fund its war in Ukraine.

India has become the biggest buyer of discounted seaborne Russian crude in the aftermath of Moscow’s 2022 invasion of Ukraine, importing about 1.7 million barrels per day in the first nine months of this year.

Russian oil is a main irritant for U.S. President Donald Trump in prolonged trade talks with India. Half of his 50% tariffs on Indian goods are in retaliation for those purchases.

Privately-owned Reliance Industries, the top Indian buyer of Russian crude, plans to reduce or halt completely its import of Russian oil, according to two sources familiar with the matter.

“Recalibration of Russian oil imports is ongoing and Reliance will be fully aligned to GOI (Government of India) guidelines,” a Reliance spokesman said in response to a query on whether the company plans to cut its crude imports from Russia.

India’s oil ministry did not immediately respond to a request for comment.

Indian state refiners are also reviewing their Russian oil trade documents to ensure no supply will be coming directly from Rosneft and Lukoil after the U.S. sanctioned the oil companies, a source with direct knowledge of the matter said on Thursday.

President Trump on Wednesday imposed Ukraine-related sanctions on Russia for the first time in his second term, targeting Lukoil and Rosneft as his frustration grows with Russian President Vladimir Putin.

The U.S. Treasury has given companies until November 21 to wind down their transactions with the Russian oil producers, according to a release on the sanctions on Wednesday.

“There will be massive cut. We don’t anticipate it will go to zero immediately as there will be some barrels coming into market” before the deadline, a refinery source said.

State refiners including Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals, are reviewing bills of lading for Russian crude arriving after November 21 to make sure it is not coming directly from Rosneft or Lukoil, one of the sources said.

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The companies did not immediately respond to requests for comment.

Indian state refiners rarely buy Russian oil directly from Rosneft and Lukoil as their purchases are typically done through intermediaries, trade sources said.

Reliance, which operates the world’s biggest refining complex at Jamnagar in western Gujarat state, has a long-term deal to buy nearly 500,000 bpd of crude oil from Russian oil major Rosneft. The refiner also buys Russian oil from intermediaries.

Nayara Energy, whose biggest shareholder is Rosneft, also buys oil from the company. Nayara did not immediately respond to a request for comment.