India’s crude oil supplies are unlikely to face any immediate impact from the latest US sanctions on Russian oil producers, a senior government official said, adding that the crude required for the next two months is already loaded on vessels and in transit, ensuring continuity in supplies. 

The US Treasury imposed sanctions on Russian oil producers Gazprom Neft and Surgutneftegas, as well as 183 vessels that have transported Russian oil. The sanctions aim to curtail Moscow's revenue, which the US says is being used to fund the ongoing conflict in Ukraine. Many of the sanctioned tankers have been used to ship oil to India and China, as Western sanctions and a price cap imposed by the Group of Seven (G7) in 2022 redirected Russian oil exports from Europe to Asia. Some vessels have also been used for transporting oil from Iran, which is also under sanction. 

The official noted that the immediate impact on India would be minimal. “For the next two months, we do not anticipate any major problems because the ships already in transit will arrive as scheduled. Going forward, refiners will realign supply arrangements as per their requirements,” the official said. 

India has emerged as one of the largest importers of Russian crude in the past three years. Between April and October of FY25, India imported crude worth $31.86 billion from Russia, accounting for 38.5% of the country’s total crude imports during the period. Gazprom Neft, one of the sanctioned companies, supplies a significant amount of crude to India. However, the official clarified that its absence would not have a major impact on India’s crude availability. Surgutneftegas, the other sanctioned company, does not supply oil to India. 

The official added that while there would be no direct impact, an indirect impact could emerge in the form of narrowing discounts on Russian crude. “In the worst-case scenario, oil previously purchased at discounted rates may have to be procured at market prices,” the official said. 

The sanctions triggered a surge in crude prices, with Brent crude for March delivery rising 1.82% to $81.21 per barrel on Monday, marking a four-month high. India, which imports around 85% of its crude oil needs, has maintained its stance on sourcing oil from the cheapest available sources to meet its growing demand and ensure energy security. Despite initial pressure from the US and European nations in 2022, India continued to buy Russian crude, citing national interests. 

Western sanctions on Russia and the G7 price cap have significantly reshaped the global oil trade, redirecting Russian crude supplies to Asian markets, primarily India and China. The sanctioned vessels have played a key role in facilitating these shipments, which have offset the decline in European demand for Russian oil. 

The official emphasised that Indian refiners are prepared to adjust supply chains and ensure continued availability of crude oil. “It’s early to anticipate the long-term impact, but refiners will realign supply arrangements as needed,” the official said.