Indian Refiners Reassess Russian Oil Purchases After Fresh US Sanctions

India’s state-run refiners are re-evaluating their Russian oil procurement strategy after the US blacklisted major suppliers Rosneft PJSC and Lukoil PJSC last week. Companies including Indian Oil Corp. (IOC), Bharat Petroleum Corp. (BPCL), and Hindustan Petroleum Corp. (HPCL) have paused purchases of Russia’s Urals crude while awaiting government guidance. Executives said they are exploring whether imports can continue through smaller, non-sanctioned Russian entities such as Tatneft PJSC and Sakhalin Energy.

The latest sanctions have significantly disrupted India’s Russian crude supply chain, as Rosneft, Lukoil, Surgutneftegas, and Gazprom Neft together accounted for over 80% of India’s Russian oil imports in 2024, according to Kpler data. Reliance Industries Ltd., previously India’s largest Urals buyer under a term deal with Rosneft, has swiftly shifted toward alternative supplies from the Middle East and the United States to mitigate the impact. Nayara Energy Ltd., part-owned by Rosneft and already under European and UK sanctions, remains the lone exception continuing Russian oil purchases.

Officials and industry executives note that India now faces the challenge of balancing its long-standing energy ties with Russia against the risk of secondary US sanctions and the pursuit of a trade deal with Washington. With uncertainty clouding future Russian oil flows, refiners may look to ramp up imports from West Asia and the US, as global markets brace for tighter Russian supply and rising price volatility.

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