US sanctions cut India's Russian oil imports by a third, more reductions likely

Economic Times
Economic Times
1w ago • 20 views
India's Russian oil imports dropped by a third due to new US sanctions, impacting its crude supply. This shift is significant for India's energy strategy and market dynamics.
US sanctions cut India's Russian oil imports by a third, more reductions likely
A What happened
India's imports of Russian crude oil have decreased by nearly a third after the US imposed strict sanctions on key Russian exporters on November 21. In November, India imported an average of 1.8 million barrels per day (bpd), but this is expected to drop to about 1.0 million bpd in December. Analysts suggest that imports could temporarily fall to around 800,000 bpd before stabilizing. The sanctions have prompted Indian refiners to seek alternative sources to avoid breaching regulations. Despite this decline, India has been a major buyer of discounted Russian oil since Western countries reduced their purchases following Russia's invasion of Ukraine. The sanctions have led to a shift in sourcing strategies, with refiners exploring non-designated Russian entities and increasing imports from other regions. While direct imports from Russia may decrease, the overall supply chain is adapting to maintain access to crude oil.
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Key insights

  • 1

    Significant import reduction: India's Russian oil imports fell by a third due to US sanctions.

  • 2

    Shift in sourcing strategies: Refiners are exploring alternative sources to comply with sanctions.

  • 3

    Temporary decline expected: Analysts predict a short-term dip in imports before stabilization.

Takeaways

The recent US sanctions have led to a notable decrease in India's Russian oil imports, prompting refiners to adapt their sourcing strategies. While direct imports may decline, the overall supply chain is expected to reorganize to maintain energy security.

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