India’s refiners have stopped doing business with the Russian tankers and companies sanctioned by the U.S. on Friday, a source at the Indian government told Reuters on Monday.
The outgoing U.S. Administration last week imposed the most severe sanctions on Russia’s oil yet, designating two major Russian oil companies, Gazprom Neft and Surgutneftegas, as well as 183 vessels, dozens of oil traders, oilfield service providers, insurance companies, and energy officials.
It is believed that a quarter of the Russian shadow fleet has now been sanctioned.
Despite the hefty sanctions, India expects its flows of crude from Russia not to be disrupted until March as the sanctioned tankers will be allowed to discharge until then, a senior Indian government official told Reuters on Monday.
India will allow cargoes carrying Russian oil booked before the sanctions were announced on January 10 to discharge at ports when they arrive at Indian coasts, according to the official who spoke on condition of anonymity.
India doesn’t expect major disruptions during the two-month wind-down period until March.
But “Going forward, it's early days yet to anticipate the impact, how discounts shape up, if somebody is willing to sell below the $60 price cap,” the Indian government source told Reuters.
“When it comes to buyers, China and India, in general, tend to steer clear of dealing directly with tankers and entities blacklisted by the US Treasury,” Matt Wright, lead freight analyst at Kpler, wrote in a note on Friday.
The newly sanctioned tankers handled about 42% of Russia’s total seaborne crude exports. Over half of this volume was shipped to China, making up about 61% of China’s seaborne imports of Russian oil.
Meanwhile, most of the remaining exports went to India, contributing to nearly a third of the South Asian nation’s total intake of Russian oil, according to Kpler’s analysis.
Even before the Friday sanctions, India and China had started to procure more crude from sources other than Russia and Iran, in view of the tightening U.S. sanctions on Russia and an expected clampdown on Iran’s oil exports from the incoming Trump Administration.
Source: Press Release
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