RoydadNaft –  Indian lenders, once gun-shy on Russian crude deals, are now dipping their toes back in, eyeing financing for oil trades that sidestep U.S. blacklists and stick to sanctions-compliant pricing—provided the deals involve only non-sanctioned sellers, vessels, and payment rails, sources told Bloomberg on Tuesday. 

The shift comes as refiners scramble to verify every link in the supply chain, balancing the allure of discounted Urals crude against the peril of secondary sanctions that could lock them out of the U.S. financial system.

India’s Russian oil binge—once accounting for a third of its seaborne crude imports—has hit a wall since Washington’s November sanctions hammered Russia’s oil giants, Rosneft and Lukoil, on top of earlier curbs on Gazprom Neft and Surgutneftegas.  Most Indian refiners, including Reliance Industries and state-run behemoths like Indian Oil Corp., have bailed on December spot cargoes, wary of frozen payments or arbitration nightmares if a single sanctioned entity sneaks into the mix.  Only Rosneft-backed Nayara Energy, starved of alternatives after EU penalties, is holding firm on Russian barrels.

The sanctions sting, but they’re also a boon for buyers: Russia’s Urals benchmark, once discounted $3 below Dated Brent, now trades at a mouthwatering $7-per-barrel haircut, tempting price-hungry refiners to hunt for loopholes.  Enter the banks: They’ve rolled out a compliance playbook to greenlight refiner payment requests, potentially routed through UAE dirhams or Chinese yuan to dodge dollar scrutiny.  “It’s a calculated pivot—verifying origins, ship histories, and insurers down to the last detail,” one insider noted, though the three-year cat-and-mouse game of sanctions evasion has made due diligence a Herculean task. 

U.S. Treasury officials, fresh off the sanctions rollout, hailed the compliance creep in India and China as a win for Washington’s pressure campaign against Moscow’s war chest.  Yet with loadings already dipping since late October and December imports projected at a three-year low, analysts warn the thaw could be fleeting.  “Non-sanctioned producers like Surgutneftegaz can plug some gaps, but intermediaries and shadow fleets will be key to keeping the flow alive,” said Kpler’s Sumit Ritolia. 

For India, the world’s third-largest oil importer, this high-wire act underscores the geopolitical tightrope: Snag cheap Russian crude to fuel economic growth, or play it safe and watch energy costs spike? As Trump-era tensions linger—recall his earlier finger-wagging at India as the Kremlin’s “main financier”—the jury’s out on how far New Delhi will push.  One thing’s clear: In the sanctions shadow, every barrel tells a story of risk, reward, and relentless verification.