The last supertankers filled with Russian oil bound for India left their docks in the Black Sea about four weeks ago, racing to reach their destination before Friday, when U.S. sanctions on companies doing business with Russia’s two biggest oil firms are scheduled to take effect.
The last-minute stockpiling is expected to mark the end of India’s three-year buying spree of Russian oil. Since Russia began its full-scale invasion of Ukraine in 2022, Indian companies have snapped up discounted barrels of its crude, capitalizing on depressed prices after restrictions imposed by the European Union narrowed demand.
Muyu Xu, a Singapore-based analyst at Kpler, a company that tracks global trade, said she was expecting “a notable scaling back of Russian crude oil arrivals” in India after Friday.
India’s intake of Russian crude became a stumbling block in its ongoing trade negotiations with President Trump, who started telling the country to stop buying it over the summer. In August, he stunned India by imposing a special tariff to punish it for buying the oil, effectively doubling the U.S. import duty on Indian goods to 50 percent, which dealt a crippling blow to a range of industries.
Mr. Trump said he was trying to pressure Russia to end its war in Ukraine. But the new tariff only tightened the deadlock between India and the United States, which had already been quarreling over a potential deal aimed at reducing India’s trade deficit with America. India’s foreign ministry called the tariff “unfair, unjustified and unreasonable.”
The tariff did little to slow purchases of discounted Russian crude, a trade that had proved lucrative for Indian oil companies, which refined some of the supply for domestic consumption and exported the rest to Europe and elsewhere.
In October, Mr. Trump took a different tack. The U.S. Treasury said it would start penalizing companies that did business with the two biggest Russian oil firms, Rosneft and Lukoil. While the restrictions were not aimed directly at India, Russian seaborne crude had come to account for as much as 40 percent of the country’s total supply. India was not given an exemption to keep buying it, as Hungary was this month.
Stopping the flow of Russian oil to India would allow Mr. Trump to declare victory on the issue — something he has done prematurely on several occasions. For India, it is important not to be seen as having been directly coerced. The U.S. sanctions target companies, not the Indian state itself, giving it a chance to save face.
Although India’s oil refiners are hustling to load up on Russian crude before the deadline, they are expected to obey the new rules to avoid the penalties that the U.S. Treasury could inflict on them and their partners, which include international banks and technology firms.
A spokesman for Reliance Industries, India’s biggest private oil company, said the company had “an impeccable record” of adhering to sanctions and would abide by the new rules.
Indian state-owned oil firms are also buyers of Russian crude. Rajeev Lala, a director at S&P Global Energy who has a background in tracking those companies, said he expected them “to keep their supply sources clean of sanctioned barrels” amid greater scrutiny.
How Nayara Energy, India’s second-largest private oil company, will deal with the restrictions is a more complicated matter. It is 49 percent owned by Rosneft. Most of the remaining stake is held by a Russian investment group led by Ilya Sherbovich, who once served on Rosneft’s board. Nayara is technically not subject to the new U.S. sanctions because Rosneft’s ownership does not exceed the 50 percent threshold.
Nayara, characterized as a black box by industry analysts, has emphasized that it is an Indian company. When the European Union targeted its products with sanctions in July, the company said the move “ignores both international law and the sovereignty of India.”
Nayara did not respond to requests for comment.
If any of the smaller companies operating in India want to keep purchasing Russian oil after Friday, they will need to buy in small quantities and do so clandestinely. Ms. Xu of Kpler said all Indian buyers “want to remain cautious” as they wait to see whether the U.S. authorities find more ways to crack down on Russian oil.
This week, India’s oil minister, Hardeep Singh Puri, seemed to extend an olive branch to the United States, announcing on social media that India would buy liquefied petroleum gas, including propane and butane, from the U.S. Gulf Coast for the first time. That would open “one of the largest and the world’s fastest-growing” markets for cooking gas to the United States, he said.
Alex Travelli is a correspondent based in New Delhi, writing about business and economic developments in India and the rest of South Asia.
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