New Delhi: Major Indian refineries, including those operated by Reliance Industries and state-owned companies, are poised to halt imports of Russian crude oil due to tightened U.S. sanctions, sources familiar with the matter told The Times of India. The decision follows increased restrictions targeting Russia’s energy sector, which have disrupted the flow of affordable crude to India, a key buyer of Russian oil since the Ukraine conflict began.
The U.S. sanctions, aimed at curbing Russia’s oil revenue, have complicated payment mechanisms and shipping logistics. Indian refiners, reliant on Russian crude for its cost advantage, now face challenges in securing alternative supplies. The sanctions have particularly impacted the use of non-dollar currencies for transactions, a workaround previously employed to bypass Western restrictions. This has led to delays in payments and supply chain disruptions, prompting refiners to reconsider their sourcing strategies.
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Reliance Industries, one of India’s largest private refiners, and public sector units like Indian Oil Corporation are exploring options in the Middle East and Africa to fill the gap. These regions offer stable but pricier crude, potentially increasing refining costs. The shift comes as India, the world’s third-largest oil importer, seeks to maintain energy security while navigating geopolitical pressures.
Sources indicate that the suspension of Russian oil imports could begin as early as next month, with refiners already reducing purchases. In 2023, Russia accounted for nearly 40% of India’s crude imports, a significant rise from pre-conflict levels. The pivot away from Russian oil may strain refining margins and impact fuel prices domestically, though companies are working to mitigate these effects through diversified sourcing.
The need to balance economic and diplomatic considerations. While India has maintained a neutral stance on the Russia-Ukraine conflict, the tightening U.S. sanctions have forced a recalibration of its oil import strategy. Refiners are now prioritizing supply stability to avoid disruptions in the domestic market.
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