Russia's oil exports to India drops sharply after US sanctions on two major firms

Russian oil export to India witnessed a sharp decline after the US sanctioned two of Moscow’s biggest oil companies, Rosneft and Lukoil, last month over the Russia-Ukraine war, provisional tanker data shows.

Although industry experts believe it is too early to gauge the impact and a clearer picture would emerge in a month or two, refiners have been wary of Washington’s latest sanctions, which will take effect on November 21.

The sanctions on the oil giants are the first imposed against Russia since Trump returned to the White House and aim to cut key revenues from oil sales for Russia. “Now is the time to stop the killing and for an immediate ceasefire,” Scott Bessent said at the time of announcing the sanctions.

Have oil imports to India gone down?

In the week ending October 27, Russia’s crude oil exports to India averaged 1.19 million barrels per day (bpd), a sharp drop from 1.95 million bpd recorded over the previous two weeks, according to provisional vessel-tracking data from global commodity analytics firm Kpler.

The decline was largely driven by lower shipments from Rosneft and Lukoil, which together account for more than half of Russia’s oil output and exports, and previously supplied over two-thirds of India’s Russian oil imports.

Exports from Rosneft, Russia’s largest oil producer, fell to 0.81 million bpd in the week to October 27, down from 1.41 million bpd the week before. Lukoil recorded no shipments to India during the same period, compared with 0.24 million bpd in the previous week.

Will it affect India?

The sanctions on Rosneft and Lukoil are likely to hit India’s Russian oil imports, as Indian refiners like  HPCL-Mittal Energy (HMEL) have already announced suspension in Russian oil imports, along with India’s largest refiner, Indian Oil Corporation, saying that it will comply with US sanctions.

Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler, said, according to The Indian Express, “Following the sanctions, we observed accelerated Russian crude arrivals ahead of the deadline, with no refiner except Nayara (which has Rosneft in its promoter group) expected to import from sanctioned suppliers thereafter. Russian crude flows are likely to remain around 1.6–1.8 million bpd until November 21, before tapering as refiners avoid potential OFAC-related exposure. While Indian refiners will continue sourcing Russian grades via unsanctioned intermediaries, they are expected to proceed with greater caution."

Ritola added, “December–January imports of Russian crude should see a notable dip as refiners assess the impact and rebuild supply chains. Despite the short-term turbulence, a complete halt in Russian imports remains unlikely, given attractive margins and India’s geopolitical stance. Unless refiners themselves face direct sanctions or the Government of India imposes formal restrictions—both improbable scenarios—Russian barrels will continue flowing to India, though via more complex logistical, financial, and trading arrangements.”