The last supertankers filled with Russian oil bound for India left their docks in the Black Sea about four weeks ago, racing to reach their destination before Friday, when US sanctions on companies doing business with Russia’s two biggest oil firms are scheduled to take effect.
The last-minute stockpiling is expected to mark the end of India’s three-year buying spree of Russian oil. Since Russia began its full-scale invasion of Ukraine in 2022, Indian companies have snapped up discounted barrels of its crude, capitalizing on depressed prices after restrictions imposed by the European Union narrowed demand.
India’s intake of Russian crude became a stumbling block in its ongoing trade negotiations with President Donald Trump, who started telling the country to stop buying it over the summer. In August, he stunned India by imposing a special tariff to punish it for buying the oil, effectively doubling the US import duty on Indian goods to 50 per cent, which dealt a crippling blow to a range of industries.
Trump said he was trying to pressure Russia to end its war in Ukraine. But the new tariff only tightened the deadlock between India and the United States, which had already been quarreling over a potential deal aimed at reducing India’s trade deficit with the US India’s Foreign Ministry called the tariff “unfair, unjustified and unreasonable.”
The tariff did little to slow purchases of discounted Russian crude, a trade that had proved lucrative for Indian oil companies, which refined some of the supply for domestic consumption and exported the rest to Europe and elsewhere.
In October, Trump took a different tack. The US Treasury said it would start penalizing companies that did business with the two biggest Russian oil firms, Rosneft and Lukoil. While the restrictions were not aimed directly at India, Russian seaborne crude had come to account for as much as 40 per cent of the country’s total supply. India was not given an exemption to keep buying it, as Hungary was this month.
Although India’s oil refiners are hustling to load up on Russian crude before the deadline, they are expected to obey the new rules to avoid the penalties that the US Treasury could inflict on them and their partners, which include international banks and technology firms.
