All Indian oil refiners, including both private groups and state-owned entities, have halted deliveries of Russian oil to the shipping line Sovcomflot in line with the latest round of U.S. sanctions. This shift was reported by Bloomberg, which cited people briefed on the matter. The move underscores India’s tightening approach to sanctioned Russian assets as Western restrictions widen, even as New Delhi maintains its own official stance on energy imports.
To enforce compliance, Indian refiners are now vigilant about the ownership and affiliations of each tanker, ensuring vessels are not linked to Sovcomflot or any other entity under sanction. The scrutiny represents a tightening of risk controls across India’s refining sector, where lenders and insurers have been increasingly cautious about sanctioned oil flows. Market observers note that such due diligence adds an extra layer of cost and complexity to procurement, potentially slowing some shipments and prompting refiners to diversify sources where feasible.
Sovcomflot’s difficulties are likely to narrow Russia’s available tanker capacity for exports and may prompt the company to offer steeper discounts to buyers to offset higher freight costs and a shrinking fleet, according to people familiar with the discussions. The ripple effect could influence global oil flows, as Russia seeks new routes and customers in a market with growing scrutiny over sanctions compliance.
Earlier, on March 21, Reuters reported that Reliance Industries in India indicated it would abstain from supplying Russian crude to Sovcomflot-owned tankers in response to U.S. sanctions. The report suggested other Indian refiners might follow the same path, signaling a broader intent within the Indian refining sector to align with sanctions regimes while balancing domestic energy needs and economics. This could lead to a wider reduction in Russia’s oil shipments to India, at least through sanctioned channels.
In February 2024, U.S. authorities extended restrictions to Sovcomflot and its 14-tanker fleet in response to Moscow’s actions in Ukraine. The targeted measures aim to limit Russia’s maritime flexibility and raise the cost of moving its crude to global markets, a dynamic that can influence pricing, credit terms, and insurance costs for related cargoes.
As a result, India’s purchases of premium Russian crude have cooled, reflecting a cautious stance amid the evolving sanctions landscape. Energy buyers in India are weighing geopolitical risk, price differentials, and supply reliability as they navigate a market shaped by Western policy and Russian production decisions. The situation remains fluid, with refiners closely monitoring regulatory developments and the operational status of sanctioned vessels in global trade networks. (Attribution: Bloomberg; Reuters)