India Signals a 50% Cut in Russian Oil Imports Under U.S. Sanctions Pressure

CL=F +1.86% ROSN.ME -3.77%

India could reduce its imports of Russian crude oil by 50%, a former foreign minister in New Delhi told local media, noting that both India and Russia would nevertheless look for ways to go around U.S. sanctions to keep some oil flowing.

“We will be gradually reducing oil purchases from Russia…Already there is a reduction, and there’ll be more reduction. It will be more like a 50 per cent reduction. But some oil will still come,” Kanwal Sibal said, as quoted by Business Today.

“On oil purchases, certainly we will have to diversify because our companies, both public and private sector and our banks will be loath to attract US sanctions and therefore there will be a steady fall in our orders. Though some oil will still flow through the spot market but it will be much-reduced volumes. Russia also understands that,” Sibal added.

U.S. sanctions on Rosneft and Lukoil went into effect on November 21, prompting a drop in new orders from Indian refiners even before the deadline. Even so, Kpler data showed that Indian buyers were on track to import the most oil from Russia since July in November, at 1.855 million barrels daily. This would compare to 1.48 million barrels daily for October.

“Russian supply is expected to be high in November as many refineries tried to fill the stocks prior to the U.S. sanctions deadline and also due to the rule for oil products production for the EU market from non-Russian oil from 2026,” an unnamed trader told Reuters, which cited the Kpler data.

Expectations for this month, however, are for a sharp drop in imports, possibly to the lowest since 2022. Per India’s Business Today, imports from Russia could slide by 47% to around 1 million barrels daily. Meanwhile, Finland-based Centre for Research in Energy and Clean Air reported India had bought a total of 5.4 million tons of Russian crude over the first nine months of the year, paying some 2.1 billion euros, or $2.43 billion.

By Irina Slav for Oilprice.com

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