Bhubaneswar, India: India is preparing to scale back imports of Russian crude oil following fresh US sanctions on Moscow-backed producers Rosneft and Lukoil, a move that could reshape global energy trade and ease a key hurdle in the long-pending India–US trade deal, sources told Reuters.
The sanctions, announced by US President Donald Trump and enforced through the Treasury Department, target Russia’s two largest oil companies, which provide a significant portion of the Kremlin’s revenue for military operations.
“Given President Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine,” said US Treasury Secretary Scott Bessent.
The restrictions are expected to hit the Russian economy hard, as taxes and profits from oil and gas account for roughly a quarter of the federal budget. Analysts also warn that global energy markets could experience disruptions, especially in Asia, where India and China have become major buyers of discounted Russian crude since 2022.
Indian Refiners Reassess Russian Oil Imports
Following the sanctions, Reliance Industries Ltd. (RIL) has announced plans to stop imports of Russian crude under its 500,000 barrels-per-day deal with Rosneft, a spokesperson told Reuters. Other state refiners — Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) — are reviewing contracts and supply chains to ensure compliance with international regulations.
“Recalibration of Russian oil imports is ongoing and Reliance Industries will be fully aligned with Government of India guidelines,” said the RIL spokesperson.
Industry insiders noted that while the reduction will be substantial, it is likely to occur gradually, with some barrels still entering the market via intermediaries. Analysts view the step as a strategic recalibration, allowing India to maintain energy security while aligning with US sanctions.
Implications for the India–US Trade Deal
The recalibration could remove a major roadblock in the ongoing India–US trade negotiations, which have been under discussion for months. By reducing direct Russian oil purchases, India demonstrates compliance with Western sanctions while continuing to safeguard its domestic energy requirements.
“India will continue to secure its energy needs while aligning with international regulations. A calibrated reduction in Russian crude imports is expected,” a government source said on condition of anonymity.
Experts note that any significant shift away from Russian crude could temporarily affect domestic fuel prices and refinery margins, but availability from alternative sources and strategic reserves should mitigate severe disruptions.
Global and Domestic Context
India has historically been one of the largest importers of Russian oil, capitalizing on discounted supplies to feed its refining and industrial needs. Reliance’s Jamnagar complex, the world’s largest refinery, has been a major recipient of these shipments, helping the company maintain competitive margins in domestic fuel and petrochemical markets.
The US sanctions are part of a broader strategy to pressure Russia into ending the Ukraine war by cutting off revenue sources that fund its military operations. Analysts say that India’s measured response balances energy security, economic interests, and international diplomatic considerations, while potentially strengthening ties with Washington in the ongoing trade talks.
With global energy markets closely watching the developments, India’s next steps in managing Russian oil imports are expected to have significant ramifications for both regional geopolitics and domestic fuel markets.
-OdishaAge
