New US Sanctions Threaten to Disrupt India’s Russian Oil Supply

India’s steady flow of discounted Russian crude oil is set for a sharp but temporary decline as new US sanctions targeting Moscow’s largest oil exporters—Rosneft and Lukoil—come into full effect. Analysts say that while imports will reduce significantly, they are unlikely to stop altogether.

The latest sanctions, effective from November 21, restrict dealings with Rosneft, Lukoil, and their majority-owned subsidiaries, effectively turning any crude associated with them into what traders describe as a “sanctioned molecule.” This has prompted Indian refiners to reassess procurement strategies.

Despite the impending restrictions, India’s imports of Russian crude remained robust ahead of the deadline. Average imports this year stand at 1.7 million barrels per day (bpd), with November arrivals estimated at 1.8–1.9 million bpd as refiners accelerated purchases to capitalise on discounts.

However, analysts expect a steep drop in the coming months. December and January imports could fall to nearly 400,000 bpd as shipping, insurance, and payment channels face renewed scrutiny and logistical hurdles.

Energy experts note that India will temporarily diversify sourcing towards Middle Eastern and West African grades while waiting for market adjustments and alternative arrangements that could partially restore Russian flows.