IndianOil Corp will comply with all international sanctions, its chairman AS Sahney said on Monday, following the US move to sanction Russia’s top crude exporters Rosneft and Lukoil.
Last week’s US sanctions have triggered a reassessment among refiners in India, China and elsewhere over their reliance on Russian supplies. “We will abide by all the sanctions imposed by the international community,” Sahney said, without elaborating.
Reliance Industries, India’s largest importer of Russian oil, said on Friday it would “maintain full compliance with sanctions and adapt refinery operations accordingly”.
Russian oil accounts for about half of Reliance’s crude imports and roughly one-fifth of Indian Oil’s. Reliance has a long-term contract with Rosneft to purchase 500,000 barrels a day, while Indian Oil and other state-run refiners mainly source Russian cargoes from traders in the spot market.
Rosneft and Lukoil together export around 3.1 million barrels a day, about 60% of Russia’s total 5 million barrels a day of export. The two companies account for roughly two-thirds of India’s Russian oil imports of about 1.5 million barrels a day.
Industry executives said refiners are unlikely to engage with sanctioned entities, though Moscow may find ways to skirt restrictions as it has done with the G7 price cap over the past two years. Shadow fleets, ship-to-ship transfers and newly created trading firms could again help sustain Russian exports, they said.
The Indian government has yet to comment on the latest US sanctions. Russia, for its part, has said the measures will not significantly affect its economy. Indian refiners are preparing to replace Russian oil with supplies from the Middle East, Brazil, the US and Africa, executives said. Russian crude currently makes up about one-third of India’s total oil imports.
