RoydadNaft –  India is set to halve its imports of Russian crude oil as new U.S. sanctions on major Russian energy giants take full effect, a former top diplomat said, though both nations are scrambling for workarounds to keep some discounted barrels flowing despite the mounting pressure from Washington.

The move comes in the wake of U.S. Treasury sanctions targeting Rosneft and Lukoil, which kicked in on November 21, forcing Indian refiners and banks to pull back sharply to avoid secondary penalties. 0 Kanwal Sibal, a former Indian foreign secretary, told local media that purchases from Russia have already begun tapering, with a roughly 50 percent drop on the horizon – though limited spot-market deals could sustain a trickle of supply. 8

“We will gradually reduce buying oil from Russia. The reduction has already started and will continue. The cut will probably be around 50 percent, but some oil will still come,” Sibal said in remarks published by Business Today. 0 He added that Indian firms, both state-run and private, along with banks, are wary of U.S. reprisals, prompting a diversification of supply sources. “Russia is aware of this situation,” he noted, hinting at ongoing bilateral efforts to navigate the restrictions.

The sanctions have already triggered a post-deadline plunge, with December arrivals projected to plummet to around 1 million barrels per day (bpd) from November’s five-month peak of 1.855 million bpd – a level that represented over a third of India’s total crude imports. 1 5 Analysts at Kpler, which tracks tanker movements, attribute the November surge to frantic pre-deadline stockpiling by refiners like Reliance Industries and state giants Indian Oil Corp and Bharat Petroleum Corp. 1 Some forecasts even warn of a temporary dip as low as 800,000 bpd before volumes stabilize through indirect channels. 1

India’s pivot away from Russian oil – which ballooned from under 1 percent of its imports in 2021 to nearly 40 percent this year amid post-Ukraine invasion discounts – underscores the Trump administration’s aggressive use of tariffs and sanctions as leverage in trade talks. 6 Half of the 50 percent U.S. tariffs on Indian goods stem directly from New Delhi’s Russian energy purchases, sources say, complicating negotiations even as global oil surpluses loom. 2 3

While Nayara Energy – part-owned by sanctioned Rosneft – vows to stick with Russian grades at around 400,000 bpd, most buyers are eyeing alternatives from the U.S., Iraq, and Saudi Arabia, with U.S. imports already hitting a four-year high in October. 7 9 As Putin prepares for a December summit in New Delhi, the oil spat risks broader ripples in the strategic partnership, though experts doubt a full cutoff: “As long as broader secondary sanctions aren’t applied, India is likely to continue importing… through more indirect routes.” 5