India's Russian oil lifeline at risk

New US sanctions threaten to disrupt India's Russian crude oil supply

- PRESS TRUST OF INDIA

India's imports of Russian crude oil - the feedstock for fuels like petrol and diesel - are expected to drop sharply in the near term but not halt entirely as new US sanctions on Moscow's top oil exporters take full effect, analysts said.

US sanctions on Rosneft and Lukoil, and their majority-owned subsidiaries, took effect November 21, effectively turning crude linked to these firms into a "sanctioned molecule".

India's crude oil imports from Russia, averaging 1.7 million barrels per day (bpd) this year, remained firm ahead of the cutoff, with November arrivals projected at 1.8-1.9 million bpd, as refiners maximise discounted purchases. But flows are expected to drop noticeably in December and January, with analysts estimating near-term declines to around 4,00,000 bpd.

Western sanctions and reduced European demand made Russian oil available at steep discounts. As a result, India's Russian crude imports surged from under 1 per cent to nearly 40 per cent of its total crude oil imports in a short span. In November, Russia continued to be India's top supplier, making up for about a third of all crude oil imported by the country.