www.forbes.com

India Stops Accepting Russian Oil Delivered By US-Sanctioned Tankers, Reports Say

Siladitya Ray

3-4 minutes

Topline

Indian oil refineries have stopped accepting Russian crude oil delivered by tankers operated by Sovcomflot—Russia’s largest commercial shipping company that has been sanctioned by the U.S.—Bloomberg reported, potentially dealing a blow to Moscow’s economy as India is one of the largest importers of its fossil fuels since the start of the Ukraine war.

File Photo: India has emerged as a major buyer of Russian oil since the Ukraine war.

AFP via Getty Images

Key Facts

According to Bloomberg, all private and state-run Indian oil companies have stopped taking delivery of Russian crude carried by Sovcomflot’s tankers, including Indian Oil Corporation—the country’s largest.

The oil companies have reportedly been inspecting all ships to ensure Sovcomflot or any other sanctioned organization does not operate them.

The inspections have also disrupted Russian crude delivery by other vessels, which are also being forced to wait for several weeks off the country’s coast with no clear timeline on when they will be able to deliver their cargo, the report added.

Reuters reported on Thursday that Reliance Industries, India’s largest private oil firm and operator of the world’s biggest oil refinery complex, has also refused to accept crude delivered by Sovcomflot’s tankers.

The report added that Reliance has requested its Russian suppliers to not use the sanctioned company’s fleet for future deliveries.

None of the companies have publicly spoken on the matter and sources cited by both reports say the issue was private and sensitive.

News Peg

Last month, the U.S. government announced a raft of 500 new sanctions against Russia in response to the death of jailed opposition leader Alexei Navalny and its ongoing invasion of Ukraine. President Joe Biden’s statement announcing the sanctions said Russia’s financial sector, the country’s defense industry and “sanctions evaders across multiple continents,” were being targeted. The Treasury Department announced that Sovcomflot was also being targeted as part of an effort to “responsibly reduce Russia’s revenue from oil sales.” The sanctions identified 14 crude oil tankers linked to the shipping company.

Key Background

India has emerged as a major importer of Russian crude oil over the past two years after Moscow was hit with a string of sanctions by the West following its invasion of Ukraine. According to the Centre for Research on Energy and Clean Air (CREA), India remained the second largest importer of Russian crude oil—just behind China—in February this year. This has meant Russia has become India’s top crude oil supplier. Despite pressure from the West over the past two years, India’s government has relied on cheap Russian oil to help curb inflation. Last month, Bloomberg reported that India was becoming a key global player in the oil market as it was refining its cheap Russian crude imports and then exporting it to Europe and the U.S.

Further Reading

India Halts Russia Oil Supplies From Sanctioned Tanker Giant (Bloomberg)

India's Reliance refusing Sovcomflot oil shipments after sanctions, sources say (Reuters)