India’s state-run refiners are considering whether they can continue to take some discounted Russian oil cargoes by leaning on small suppliers instead of energy giants Rosneft PJSC and Lukoil PJSC, both blacklisted by the US last week.
Since the latest round of US sanctions was announced, refiners including Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. have stayed out of the market for Urals crude, Russia’s benchmark grade. They are instead waiting for government direction and weighing their options, according to senior refinery executives.
With other major producers Surgutneftegas PAO and Gazprom Neft blacklisted earlier, processors are trying to understand exactly how much can be bought from non-sanctioned entities in Russia and at what price, said the executives, who asked not to be identified as they’re not authorized to speak publicly. They are also trying to understand how much of Rosneft oil will be channeled through other entities.
Together, the four sanctioned firms accounted for more than 80% of India’s Russian oil imports in 2024, according to Kpler data.
India’s refiners would usually be actively negotiating with Russian oil sellers this week, heading into November loading and December delivery.
Instead, flows of Russian oil are expected to plunge, with private refiner Reliance Industries Ltd. seen among the hardest hit, as for much of this year it has procured Urals via a term contract with Rosneft. Since Washington laid out its sanctions plan, Reliance, the single-largest buyer of Urals in India until now, has rushed to snap up alternative crudes from the Middle East and the US, in line with its state-owned peers.
The only exception in India could be Nayara Energy Ltd., which is backed by Rosneft and already sanctioned by Europe and the UK. It has not shown signs of curbing Russian purchases.
Buyers in China, Russia’s top customer, have long shown themselves to be more willing to turn a blind eye to sanctions — but even there, large state-backed entities have avoided purchases in recent days, given the new risks.
The latest sanctions cancel out existing restrictions like the $60-a-barrel price cap imposed by the Group of Seven nations, but they share the aim of making Russia’s trades harder, costlier and riskier — all without forcing a sudden supply shock that might spike global prices, according to officials familiar with the Trump administration’s strategy.
India has been balancing the risk of secondary sanctions — and the need to secure a trade deal with the US — against the risks that come with allowing much-needed ties to Russia to fray. State refiners have yet to receive direction from the government, the executives said. S
While the four sanctioned suppliers account for the lion’s share of Indian imports, Russia does have other smaller producers, including Tatneft PJSC and Sakhalin Energy.
IOC, BPCL, HPCL and Reliance did not immediately respond to requests for comment. The oil ministry also did not immediately respond to Bloomberg queries.
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