Despite new US sanctions, Russian oil may flow to India through loopholes

It may be too early to pronounce the end of the $69-billion India-Russia oil trade from last Wednesday’s sanctions by Washington on two of Russia’s biggest oil producers and new sanctions package by the European Union on Russian oil and gas.

- BY S VENKAT NARAYAN Our Special Correspondent

There is a loophole: While the US sanctioned Russian firms Rosneft and Lukoil, Russian oil itself was spared by both Washington and Brussels, experts and refining officials said, with the result that it continuesc to trade in the world market.

Annually, Russia exports oil worth $200 billion, and gas worth $45 billion.

Indian refiners will break no law, domestic or international, for buying Russian oil if the seller is not sanctioned, three officials from two state refiners and a private refiner said. In other words, the sanctions regime leaves suppliers from other countries free to sell Russian oil.

Nearly 70 percent of India's supplies this year came from Rosneft and Lukoil, according to shipping data. After adding shipments from Surgutneftegaz, another leading Russian oil producer, the proportion in the Indian oil import basket creeps up to 78 percent. It is, however, not clear how Surgutneftegaz, which was sanctioned by the US back in January, is still supplying India.