By Admin 
America has imposed sanctions on two Russian oil companies, Rosneft and Lukoil. These are the two largest oil companies of Russia and the ban is likely to affect Moscow’s economy. The Trump administration has accused these companies of funding Russia for the ongoing war in Ukraine. Amidst all this, the biggest question remains that what impact will the US sanctions on two leading Russian oil companies have on India?
Russian economy will be affected
The new sanctions are likely to hit the Russian economy, as taxes from the oil and gas industries account for about a quarter of Moscow’s budget. China-India are the largest buyers of Russian oil and energy. Last year, China bought a record more than 100 million tons of Russian crude, accounting for about 20 percent of Beijing’s total energy imports. India has become the largest buyer of Russian crude oil after Russia attacked Ukraine in 2022. This year, India has imported 17 lakh barrels of oil per day from Russia in 9 months.
Government refineries busy reviewing documents
According to Reuters report, Indian government refineries are reviewing their Russian oil trade documents. This is being done to ensure that India will not get oil supplies from these two Russian companies after the US sanctions. Government refineries including Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Mangalore Refinery and Petrochemicals are reviewing the bill of lading documents for Russian crude.
What will be the impact of US sanctions on India?
The companies have not yet issued any statement on this matter. Anyway, Indian government refineries do not buy Russian oil directly from Rosneft and Lukoil. India purchases Russian crude oil through middlemen. According to the report of news agency PTI, US sanctions are likely to affect Reliance Industries’ crude oil imports from Russia, while government refineries can continue purchasing through middlemen for now.
Reliance Industries likely to be affected
The government is reportedly assessing the risks of these sanctions, but is unlikely to immediately stop the flow of Russian crude as they buy all the oil they need from traders, the majority of whom are European traders (who are outside the scope of the sanctions). Reliance Industries Limited may have to rebalance its imports as it buys crude oil directly from Russia’s Rosneft.
In December 2024, Reliance had signed a term agreement with Russian company Rosneft (which is now banned) to import 5 lakh barrels of Russian oil per day for 25 years. It also buys oil from middlemen. The two companies on which America has imposed sanctions export 31 lakh barrels of oil daily. Rosneft alone exports six percent of global oil production and almost half of Russia’s total oil production.
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