India faces threat as US sanctions 2 Russian oil firms

India’s crude oil purchase from Russia faces an imminent threat after US President Donald Trump imposed sanctions on two of the biggest Russian oil companies — Rosneft and Lukoil.

The cut-off date for buying crude from the two companies is November 21. This comes less than week after the UK imposed sanctions of these two companies.

Sources in New Delhi said after the sanctions on the two companies, there was a dilemma over sourcing Russian crude oil. The fresh sanctions pose two-pronged obstacles for India — one, how to pay these Russian companies for the oil after the cut-off date as no bank will allow payment fearing sanctions and second, India and its oil companies could face secondary sanctions from the US if the import continues.

India imports around two million barrels of crude daily from Russia and its main suppliers are Rosneft and Lukoil. The sources said an option for further import would be possible if the crude oil was offered by Russia through a company that was not sanctioned. Earlier this year, the UK and the US sanctioned Russian energy companies Gazprom Neft and Surgutneftegas.

India already faces a 50 per cent tariff on goods exported to the US. Half of this tariff is reciprocal and the other half punitive for buying crude oil from Russia. Indian oil importers could curtail imports of Russian oil to ensure they are in compliance with the US sanctions. India has become the biggest buyer of Russian oil, sold at a fixed discounted rate after western nations shunned purchases and imposed sanctions on Moscow.

Through the fresh sanctions, unveiled by Treasury Secretary Scott Bessent, the US made it clear that Washington DC stood ready to take action to stop Russia’s ability to continue with the conflict with Ukraine.

“Given President (Vladimir) Putin’s refusal to end this senseless war, the Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine,” Bessent said in a statement. “We encourage our allies to join us and adhere to these sanctions,” he said.

Rosneft, a state-controlled company headed by Russian President Vladimir Putin’s close ally Igor Sechin, and Lukoil, a privately owned firm, account for almost 3.1 million barrels of oil exports daily.

The UK estimates that Rosneft alone is responsible for nearly half of all Russian oil production, which makes up 6 per cent of the global output.

Oil and gas are Russia’s biggest exports with Moscow’s biggest customers, including China and India, making up for most of Russia’s energy exports.

India