Russian oil imports, cuts by the Reliance Industries, to comply with Western Sanction

 

India’s top importer of Russian oil, the conglomerate Reliance Industries Ltd, says it will abide by Western sanctions, ending several days of speculation about how the company will manage new measures targeting Russia’s two largest oil companies. 

Indian refiners have paused purchases of Russian crude oil amid thinning discounts as well as Washington’s threats of punishment for buying the commodity from Russia, two news reports have said.

State-owned Indian refiners Indian Oil, Bharat Petroleum, Hindustan Petroleum and Mangalore Refinery did not seek Russian crude over the last week or so, Reuters reported citing sources, who also said that the companies had turned to buying oil from other places such as the UAE and West Africa.

While US President Donald Trump had earlier in July threatened to impose a 100% tariff on countries buying Russian crude unless Moscow entered into a ceasefire with Ukraine in 50 days, on Wednesday (July 30) he said Washington would levy a 25% tariff on India, along with a “penalty” for buying energy and military equipment from Russia, on August 1.

Following Trump’s announcement on Wednesday, the Union government asked state-owned refiners to draft plans for buying oil from elsewhere in the event that ‘Russian flows get stopped’, Bloomberg reported. 

 US Secretary of the Treasury Scott Bessent said the move was the result of Russian President Vladimir Putin’s “refusal to end this senseless war” and encouraged allies to adhere to the new sanctions.

The following day, the European Union adopted its 19th package of measures against Russia, which includes a full transaction ban on Rosneft. The EU has previously said that, starting January 21, it will not receive fuel imports from refineries that received or processed Russian oil 60 days prior to shipping.

Reliance, chaired by billionaire businessman Mukesh Ambani, operates the world’s biggest refining complex in western Gujarat. The company has purchased roughly half of the 1.7-1.8 million barrels per day (bpd) of discounted Russian crude shipped to India, the news agency Press Trust of India reported this week.