India’s state refiners have begun revising their documents on Russian oil trade to ensure that no supplies come directly from recently sanctioned Russian oil giants Rosneft and Lukoil. A source with direct knowledge of the matter spoke to Reuters on Thursday.
The move comes after US President Donald Trump imposed Ukraine-related sanctions on Russia for the first time in his second term on Wednesday. The sanctions target Rosneft and Lukoil in an effort to increase pressure on Russia to agree to a ceasefire, Reuters reported.
The U.S. Treasury Department issued a wind-down period and set a Nov. 21 deadline for companies to stop transacting with Russian oil producers, according to a sanctions disclosure on Wednesday.
State Refinery Compliance Checks
In response to the deadline, India’s major state refiners, including Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals, are reviewing waybill documents for any Russian oil arriving after the deadline. The aim is to confirm that the shipments do not come directly from Rosneft or Lukoil, Reuters reported.
Indian state refiners rarely buy Russian crude directly from Rosneft and Lukoil. Instead, intermediaries typically facilitate these transactions and provide a layer of separation from directly sanctioned companies.
India’s dependence on cheap oil
Since Western nations suspended their purchases following Russia’s February 2022 invasion of Ukraine, India has become the largest importer of discounted Russian marine crude.
Data from January to September show that India imports about 1.7 million barrels of Russian crude a day, with private refiners Reliance Industries and Nayara Energy taking most of those imports.
The US administration has imposed a steep 50% tariff on most Indian imports effective August 27. This action includes a 25% reciprocal tariff and an additional 25% penalty due to the continued purchase of Russian oil.
How do US sanctions work?
The United States enforces the measures through the Office of Foreign Assets Control (OFAC), which freezes the assets and interests of designated individuals or entities. Prohibits US persons from transacting with them unless specifically authorized by a government authority. The agency also restricts entities that are 50% or more owned by sanctioned individuals or organizations.
The sanctions report claims that any foreign financial institution found to be conducting or facilitating transactions or providing any service related to a Russian military-industrial base or blocked companies may also be at risk of sanctions by OFAC.
Violations of US sanctions may also result in the imposition of civil or criminal penalties, including those for foreign institutions that facilitate significant transactions with sanctioned parties.
OFAC has the authority to add or remove persons or entities from the sanctions list. “The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior,” the report said.
