US sanctions on Russian oil giants hit India hard
India is about to shake up where it gets its oil, thanks to fresh US sanctions on Russian oil giants Rosneft and Lukoil.
The new rules, announced on October 22, 2024, require all transactions with Rosneft and Lukoil to be wound down by November 21, 2024, prompting Indian refiners to halt direct purchases from these companies.
Since nearly a third of India's crude comes from Russia, this is a big deal for local refiners.
Indian refiners halt direct purchases from Russia
Major private players like Reliance are now rushing to get last-minute shipments before the deadline.
After that, Reliance plans to use middlemen for Russian oil, while Nayara still leans heavily on Russian supplies despite earlier EU restrictions.
State-owned refiners are also expected to cut back further on direct Russian purchases.
What will India do next?
To fill the gap, India will start buying more oil from places like the Middle East, Latin America, West Africa, Canada, and the US.
This shift could nudge up costs—India's annual import bill might rise by less than 2% due to lost discounts on Russian crude.
Still, even with these changes, Indian companies will likely keep finding ways to access Russian oil through indirect routes.