India halts trade with US-sanctioned Russian companies and tankers, government source says
Kremlin said the latest US sanctions on Russia's energy sector risked destabilising global markets and Moscow would do everything possible to minimise their impact
Indian refiners have stopped dealing with US-sanctioned oil tankers and entities but the country does not expect disruption to Russian crude supplies during a two-month wind-down period, a government source said on Monday.
The US Treasury on Friday imposed sanctions on Russian oil producers Gazprom Neft and Surgutneftegaz and insurers Ingosstrakh and Alfastrakhovanie Group, targeting revenue Moscow has used to fund its war with Ukraine.
Washington also sanctioned 183 vessels used for transporting Russian oil while allowing a winding down of some energy related transactions by March 12.
Keep updated, follow The Business Standard's Google news channel
India will allow Russian oil cargoes booked before Jan. 10 to discharge at ports in line with sanctions parameters, the official told reporters on condition of anonymity.
"In the next two months we do not anticipate major problems because the ships that are in transit will come through. Going forward, it's early days yet to anticipate the impact, how discounts shape up, if somebody is willing to sell below the $60 price cap," he said.
The official said Russia could offer deeper discounts to India to meet the $60 a barrel price cap imposed by Group of Seven countries in 2022 to be able to use western tankers and insurance.
"If we get Russian crude from a non-sanctioned entity which is below the price cap, I am sure we will be happy to look at it," the Indian government official said, adding that Indian banks will seek certificates of origin for Russian crude to ensure transactions do not involve sanctioned entities.
"We are the third-largest consumer. Russia will find ways to reach us," the official added.
The Kremlin said on Monday that the latest US sanctions on Russia's energy sector risked destabilising global markets and Moscow would do everything possible to minimise their impact.
Global Brent crude futures extended gains on Monday, climbing above $81 to touch their highest since August.
Most Indian refiners are negotiating annual contracts with major producers for 2025/26 and may seek higher volumes from major Middle Eastern producers.
Producers in the United States, Canada, Brazil, Guyana and members of the OPEC group of oil producers will boost output to meet demand to offset Russian supply shortages, the Indian official said.
He added that India was also examining the impact of the new U.S. sanctions on Russia's Vostok oil project, in which Indian companies have a stake.
