US sanctions on Russian oil majors may hurt RIL, Nayara

Rosneft, Lukoil major suppliers to India; crude import bill may rise by over ₹23K cr

- SHUBHANGI MATHUR

The Donald Trump administration in the US has imposed sweeping sanctions on Russia’s largest oil producers — Rosneft and Lukoil — in a fresh bid to end the war in Ukraine.

The move is expected to hit oil purchases by India’s private refiners, including Reliance Industries (RIL) and Nayara Energy, while state-run refiners, which largely buy Russian crude through traders, are likely to remain insulated for now.

The sanctions, according to experts, are likely to push up India’s annual oil import bill by $2.7 billion (₹3,490 crore). While Russia accounts for 35-40 per cent of India’s crude oil imports by volume, these two oil majors alone contribute 60 per cent of that supply.

Mukesh Ambani-led RIL holds a long-term contract to purchase nearly 500,000 barrels per day (bpd) of crude from Rosneft, while Nayara Energy is 49 per cent owned the Russian state-owned major. By contrast, Indian state-run refiners have no term deals with Moscow and rely majorly on spot cargoes arranged through intermediaries.

The US Treasury's Office of Foreign Assets Control has given companies until November 21 to wind down existing transactions with Rosneft and Lukoil.

The state-run refiners have not received any direction from the Indian government to reduce or halt Russian oil purchases, but there is constant uncertainty, a refinery executive told Business Standard. “Discounts on Russian oil are disappearing anyway. The advantage has become marginal while challenges keep increasing. No one is telling us where to buy from, but we are increasingly cautious.”