Despite mounting sanctions and geopolitical challenges, India’s oil imports from Russia remain stable, with its largest oil company ensuring compliance with international regulations while securing affordable energy for the country.
Indian Oil Corporation (IOC) continues to purchase “clean” Russian crude oil, which complies with international sanctions, a top official of the Indian public sector unit said on Tuesday .
This strategy comes as the nation has become the second-largest buyer of Russian oil since the Ukraine invasion, increasing its intake from less than 1 per cent to nearly 40 percent of total oil imports.
The surge in Russian oil imports can be largely attributed to attractive discounts on Russian crude, a consequence of Western sanctions, including a price cap set by the Group of Seven (G7) nations. These sanctions, aimed at curbing Russia’s funding for its war efforts, have led to European countries shunning Russian oil, allowing India and China to step in as major buyers.
Despite these sanctions, the US’s recent measures against Russian energy companies like Gazprom Neft and Surgutneftegas, as well as the 183 sanctioned tankers transporting Russian oil, are unlikely to disrupt India’s energy security. Sahney emphasized that sanctioned tankers would not be allowed to dock at Indian ports, but alternatives remain available.
The sanctions, including the USD 60 per barrel price cap imposed in December 2022, have severely impacted Russia’s oil revenues, with the country initially losing around 23 per cent of its export revenue each month. However, Russia’s workaround—using a network of “shadow fleet” tankers—has allowed it to continue exporting oil at competitive prices, albeit with a significantly reduced revenue loss, now averaging just 9 per cent per month.
Indian oil firms are now focused on contracting “clean” Russian crude, ensuring that tankers are not sanctioned and come with the required insurance. The IOC official noted that even if Russian crude no longer comes at a discount, India could rely on additional supplies from other regions such as the Middle East to maintain energy security. This strategic maneuver helps safeguard India’s energy interests amid the evolving global oil trade dynamics.
