India Sees 'Limited Impact' From US Sanctions On Russian Oil Firms, Sources Say

The Indian government is reviewing the fallout of latest US sanctions on two major Russian oil firms, even as officials downplayed any significant fallout for domestic energy supplies.

According to sources, the Ministry of Oil and Petroleum is assessing the potential impact on state-run oil marketing companies, though initial evaluations suggest the effect will be limited given India's current sourcing patterns.

The Donald Trump-led US administration on Wednesday announced sanctions on Rosneft and Lukoil, the two Russian oil firms which are reportedly linked to the supply of crude to India and China.

Sources, who spoke to NDTV Profit, said that Indian OMCs procure Russian crude through intermediaries, not directly from the sanctioned firms, and that no fixed contracts exist with Rosneft or Lukoil. Moreover, India's exposure to Russian oil has already declined in recent months, as refiners diversified their import baskets, they added.

India's crude imports remain well diversified, ensuring ample supply from other geographies, the persons added.

The review comes after Chinese state-owned oil companies reportedly suspended purchases of seaborne Russian oil following the sanctions on Rosneft and Lukoil, Moscow's two biggest oil producers. The sanctions — part of Washington's broader measures against Russia's invasion of Ukraine — are prompting both China and India, Russia's largest buyers, to rethink their import strategies.

A potential pullback from these key markets could strain Russia's oil revenues and push global crude prices higher, as importers seek alternative supplies.

Trade sources who spoke to Reuters said PetroChina, Sinopec, CNOOC, and Zhenhua Oil have halted seaborne Russian oil purchases temporarily amid fears of violating sanctions. While China imports around 1.4 million barrels per day of Russian oil by sea, most is handled by smaller independent refiners known as "teapots."

As Russian supplies tighten, India and China are expected to boost imports from the Middle East, Africa, and Latin America, driving up prices for non-sanctioned crude in the global market.