India is expected to sharply reduce its imports of crude oil from Russia, its biggest supplier, after new sanctions imposed by the US and Europe. According to a Reuters report, Reliance Industries Ltd., the country's top private buyer of Russian oil, plans to either significantly cut or completely stop buying crude from Moscow. State-run refiners are also reviewing their purchases to make sure they follow the new restrictions.
The move comes after the US and its allies announced tougher sanctions on major Russian energy companies, including Rosneft and Lukoil, over the ongoing conflict in Ukraine. Britain imposed similar sanctions last week, while the European Union approved a 19th round that bans Russian liquefied natural gas (LNG) imports.
Oil prices rise nearly 3 per cent after India's decision
Oil prices jumped by nearly 3 per cent on Thursday (23) as traders reacted to India’s review of Russian oil imports. Brent crude futures rose by $1.94 (3.1 per cent) to $64.53 per barrel, while US West Texas Intermediate (WTI) crude increased by $1.89 (3.2 per cent) to $60.39 per barrel.
Analysts said this was mainly due to fears that tighter sanctions could reduce Russian exports and disrupt global supplies. “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 chains
Reuters reported that India’s state-owned refiners are reviewing their supply chains to ensure that none of their shipments are linked directly to Russian energy companies Rosneft or Lukoil.
Reliance Industries, which became one of the largest buyers of Russian oil since 2022, is now expected to reduce its imports to follow the government’s new direction. Sources said Reliance plans to “sharply cut” imports due to the widening list of Western sanctions.
India had increased Russian crude imports in the past two years as Western nations reduced their purchases, allowing Indian refiners to buy cheaper oil. Now, with growing US pressure and tighter sanctions, refiners may turn to suppliers in the Middle East and Africa.
Experts say long-term market impact unclear
Despite the price jump, analysts are unsure whether the sanctions will have a lasting impact on global oil supply.
“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 that past sanctions had failed to significantly affect Russia’s oil output or revenue. “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, traders are watching OPEC+ production levels, China’s crude stockpiling, and ongoing wars in Ukraine and the Middle East, which could all influence global oil prices.
