New Delhi,15/01/2025: The United States has introduced its most severe sanctions yet on Russia’s energy trade, targeting traders, insurers, and around 160 oil tankers involved in transporting Russian cargo. Announced last Friday, these measures have pushed global oil prices above $80 per barrel, raising concerns about supply and price stability worldwide. The sanctions are part of Washington’s efforts to pressure Russia and come just days before Joe Biden transitions the presidency to Donald Trump.
In response, India has decided to block entry to vessels sanctioned by the US. However, ships chartered before January 10 will be allowed to unload their cargo, provided they do so by March 12. Despite this, Indian officials have reassured that oil supply is unlikely to be a problem, as OPEC and non-OPEC producers like the US, Canada, and Brazil can increase output if necessary. While supply remains stable, the recent surge in oil prices could pose challenges, though it is not expected to last long.
Indian refiners are taking steps to adapt to the changing market. They are preparing to renegotiate long-term supply agreements with Middle Eastern producers and may seek additional barrels depending on market conditions. Indian banks are also tightening compliance by requiring certificates of origin for all crude imports to ensure that shipments do not come from sanctioned sources. These measures aim to safeguard India’s energy security while adhering to international regulations.
The sanctions have also affected India’s investments in Russia’s Vostok oil project, which is now under review. Officials are concerned that the discounts India previously enjoyed on Russian crude may decrease if supplies tighten. Despite these challenges, they remain confident that Russia will find alternative ways to deliver oil to India. The situation highlights India’s need to balance energy security, economic interests, and global compliance in an increasingly complex oil market.
