Highlights:
-
India may sharply reduce or stop importing crude oil from Russia following new US and EU sanctions.
-
Reliance Industries and state-owned refiners are reviewing purchases to comply with restrictions.
-
Brent crude rose 3.1% to $64.53 per barrel; WTI crude increased 3.2% to $60.39 per barrel.
-
Sanctions target major Russian energy companies, including Rosneft and Lukoil.
- Advertisement - -
Analysts say reduced Russian exports and India’s shift could affect global oil supply and prices.
-
Long-term impact of sanctions on Russian oil output and revenue remains uncertain.
India, one of Russia’s largest oil buyers, is expected to significantly reduce or possibly halt crude imports from Moscow as new sanctions take effect from the United States and the European Union. Reliance Industries, India’s top private purchaser of Russian crude, along with state-owned refiners, is reviewing procurement plans to ensure compliance with the restrictions.
The decision comes amid rising global oil prices, with Brent crude futures increasing by $1.94, or 3.1 percent, to $64.53 per barrel, and US West Texas Intermediate (WTI) crude climbing $1.89, or 3.2 percent, to $60.39 per barrel on Thursday (Oct 23).
India Responds to New Western Sanctions
The United States and its allies recently announced tighter sanctions on major Russian energy companies, including Rosneft and Lukoil, aiming to restrict revenues for Moscow amid the ongoing conflict in Ukraine. Britain imposed similar measures last week, while the European Union approved its 19th sanctions package, which includes a ban on Russian liquefied natural gas (LNG) imports.
According to Reuters, Reliance Industries plans to “sharply cut” or even stop buying Russian crude. Indian state-owned refiners are also reviewing their supply chains to ensure that no shipments are directly connected to sanctioned Russian entities.
Over the past two years, India had increased purchases of Russian crude after Western countries reduced imports, allowing Indian refiners to access lower-cost oil. The latest sanctions, combined with US pressure, may push India to source crude from alternative suppliers in the Middle East and Africa.
Oil Market Reaction to India’s Review
Traders have reacted strongly to India’s move. Analysts attribute the nearly 3 percent increase in oil prices to concerns that sanctions and reduced Russian exports could tighten global supply.
“President Trump’s fresh sanctions hitting Russia’s biggest oil houses aim squarely at choking Kremlin war revenues, a move that could tighten physical flows of Russian barrels and force buyers to reroute volumes onto the open market,” said Priyanka Sachdeva, Senior Market Analyst at Phillip Nova.
She added, “If India cuts its Russian oil purchases under US pressure, we could see Asian demand pivot toward US crude, lifting Atlantic prices.”
Indian Refiners Reassessing Supply and Strategy
India’s state refiners are reviewing procurement strategies to ensure compliance with the sanctions. Reliance Industries, which became one of the largest buyers of Russian oil since 2022, is expected to follow government guidance and reduce imports substantially.
Sources told Reuters that Reliance plans to “sharply cut” imports to align with the new Western restrictions. Analysts note that Indian refiners could shift to suppliers in the Middle East and Africa as a result.
Experts Question Long-Term Market Impact
Despite the price increase, industry experts caution that the sanctions’ long-term effect on global oil supply remains uncertain.
“The new sanctions are certainly upping the ante between the US and Russia, but I see the oil price jump more like a knee-jerk reaction rather than a structural shift,” said Claudio Galimberti, Global Market Analysis Director at Rystad Energy.
He added, “So far, almost all the sanctions against Russia for the past three and a half years have mostly failed to dent either the volumes produced by the country or the oil revenues.”
In the short term, global oil markets will continue to monitor OPEC+ production levels, China’s crude stockpiling, and ongoing conflicts in Ukraine and the Middle East, all of which could affect pricing and supply stability.
India’s Strategic Adjustments
India’s decision reflects a broader strategy of balancing energy security and diplomatic alignment with the United States and Europe while managing domestic fuel needs. The country has historically taken advantage of discounted Russian oil, but the evolving sanctions environment may accelerate diversification toward alternative suppliers.
As India reassesses its oil imports, the global energy market faces potential shifts in trade flows and pricing. Traders and analysts will continue to watch India’s decisions closely, as the country’s consumption and import patterns have significant implications for international crude markets.
