India Suspends Trade With US-Sanctioned Russian Companies And Tankers

NEW DELHI, (Reuters) – Indian oil refiners have stopped dealing with Russian companies and tankers that have been sanctioned by the United States. However, the Indian government does not expect any major disruptions to the supply of Russian crude oil during the two-month wind-down period, a government source said on January 13.

Last week the U.S. Treasury imposed sanctions on Russian oil producers Gazprom Neft and Surgutneftegaz, as well as insurers Ingosstrakh and Alfastrakhovanie Group. The sanctions also targeted 183 vessels used to transport Russian oil, but the U.S. has allowed a wind-down of some energy-related transactions until March 12.

India will still allow Russian oil cargoes booked before January 10 to unload at its ports, in line with the sanctions. The government source stated that the ships already in transit will continue their journey without major issues.

“We do not anticipate major problems in the next two months as the ships in transit will arrive. It’s too early to predict the long-term impact or how discounts will shape up,” the official said. The official added that Russia may offer India deeper discounts to meet the $60 per barrel price cap imposed by the G7 countries in 2022, which is required for using Western tankers and insurance.

India’s government will ensure that transactions involving Russian crude are not linked to sanctioned entities by requiring certificates of origin for the oil. “Russia will find ways to reach us,” the official noted, highlighting India’s position as the third-largest consumer of oil.

Indian refiners are also negotiating contracts for 2025/26 and may increase purchases from major Middle Eastern oil producers. Additionally, Indian companies are evaluating the potential impact of U.S. sanctions on Russia’s Vostok oil project, in which they have investments.