India's reliance on cheap Russian crude oil looks set to continue despite Washington's efforts to cut off its supply chains. The US has imposed significant sanctions on Russia since the Ukraine war began, targeting two of its largest oil exporters, Rosneft and Lukoil, which have been the main suppliers to India.
These sanctions have had an initial impact, with Indian imports of Russian oil dropping by around a third in December compared to the previous month. However, industry experts believe that this was just a temporary measure, as Russia has already begun reorganising its supply chain to find alternative routes to countries like India.
The key loophole is that if the crude oil is supplied by a company that is not Rosneft or Lukoil, then the refinery is not subject to US sanctions. This has allowed new Russian oil exporters to emerge and take advantage of the demand from Indian refineries.
Analysts expect that it won't be long before the full supply chain gets reorganised, with most of the barrels being supplied by companies other than Rosneft or Lukoil. One expert, Homayoun Falakshahi, said: "It looks like the new players are emerging, which is a sign that Russia is already trying to reorganise the supply chain."
The Indian government has not issued any direct mandate to refineries on Russian oil, but they have encouraged them to act in their best interests. The low price of Russian oil is proving too attractive for many refineries, with discounts reaching as high as $9 or $10 per barrel.
Despite this, Reliance, India's largest private oil company, has publicly declared it will no longer import Russian crude into its Jamnagar refinery. This decision may have been influenced by the US sanctions and EU restrictions on importing Russian-origin oil processed in a third country.
However, analysts believe that Trump's recent actions in Venezuela could provide an opportunity for Reliance to resume purchases of Venezuelan oil. The US has captured Nicolás Maduro's government, and it remains to be seen how this will affect India's energy imports.
These sanctions have had an initial impact, with Indian imports of Russian oil dropping by around a third in December compared to the previous month. However, industry experts believe that this was just a temporary measure, as Russia has already begun reorganising its supply chain to find alternative routes to countries like India.
The key loophole is that if the crude oil is supplied by a company that is not Rosneft or Lukoil, then the refinery is not subject to US sanctions. This has allowed new Russian oil exporters to emerge and take advantage of the demand from Indian refineries.
Analysts expect that it won't be long before the full supply chain gets reorganised, with most of the barrels being supplied by companies other than Rosneft or Lukoil. One expert, Homayoun Falakshahi, said: "It looks like the new players are emerging, which is a sign that Russia is already trying to reorganise the supply chain."
The Indian government has not issued any direct mandate to refineries on Russian oil, but they have encouraged them to act in their best interests. The low price of Russian oil is proving too attractive for many refineries, with discounts reaching as high as $9 or $10 per barrel.
Despite this, Reliance, India's largest private oil company, has publicly declared it will no longer import Russian crude into its Jamnagar refinery. This decision may have been influenced by the US sanctions and EU restrictions on importing Russian-origin oil processed in a third country.
However, analysts believe that Trump's recent actions in Venezuela could provide an opportunity for Reliance to resume purchases of Venezuelan oil. The US has captured Nicolás Maduro's government, and it remains to be seen how this will affect India's energy imports.
I'm so done with the whole Russian oil situation 
. Like, can't they see that relying on cheap oil is just gonna get us all in trouble eventually? 
And now Reliance is trying to distance themselves from it by cutting ties with Russia's oil suppliers? 
It feels like we're just jumping from one hot potato to the next 
. What's gonna happen when the sanctions kick in for good and those Russian companies find new buyers? 
I'm still holding out hope that someone will come along and offer a sustainable alternative, but so far it seems like everyone's just playing a game of supply chain roulette 
.
, but at the same time, all these new russian oil exporters are gonna pop up out of nowhere like mushrooms and start supplying oil to indian refineries 
i mean, thats just how sanctions work. the us is trying to cut off supplies, but russians are smart theyre finding ways to get their oil to india no matter what.
You cut off one head and two more grow back in its place. I'm not surprised they're finding new ways to supply their oil to countries like India. It's all about the money, right? 
But hey, at least we can hope that Reliance's decision might lead to some positive change in the industry? Fingers crossed! 
. it's also cool how Reliance is being cautious but not entirely opposed to importing russian oil - i guess that says something about the value they place on stability over price 
. and now reliance is saying they're done with russian crude, which is weird because they've been making bank off it 
. and then trump comes along and starts messing with venezuela... this could be a whole new ball game 
️. wonder what's gonna happen next