New US sanctions pose challenges for Russian oil sales to India

The fresh sanctions imposed by the United States on Friday, February 23 on Moscow are expected to disrupt Russian oil sales to India, reported news agency Reuters, citing industry insiders.

India has been a key buyer of Russian crude via sea routes since the sanctions were first imposed. The recent sanctions were imposed by the US on Friday, February 23, 2024.

The United States imposed sanctions on Friday to mark the second anniversary of Moscow’s invasion of Ukraine and retaliate for the death of opposition leader Alexei Navalny.

The latest sanctions specifically target Sovcomflot, a leading Russian tanker group, and 14 crude oil tankers associated with it. The US government has alleged their involvement in breaching the G7’s price cap on Russian oil.

Indian refiners, heavily reliant on Russian crude, fear these sanctions will hamper their ability to secure vessels for transporting Russian oil, potentially leading to increased freight rates. Such complications could lower the discount traditionally enjoyed on Russian oil purchases.

Industry sources mentioned in the report highlighted concerns that Russia may have to rely more heavily on trading companies to lower the risk of further sanctions, exacerbating uncertainties in the market.

India’s dependence on Russian oil has grown in recent years, with Russia surpassing other suppliers to become India’s primary oil source in 2023.