Sign in Subscribe
Indian foreign relations

US Sanctions on Russian Oil Producers Jolt Global Markets, Hit India's Energy Supplies

Strategic Insights

— 2 min read

The Biden administration has imposed sanctions on Russia's largest oil producers, Rosneft and Lukoil, in an effort to curtail Moscow's funding for the war in Ukraine. The sanctions, affecting over 5% of global oil output, have sent oil prices soaring nearly 9% and put India in a difficult position, as the country relies heavily on Russian crude. India, a major importer of Russian oil, has suspended imports from Rosneft and Lukoil, with major refiners like Reliance Industries recalibrating their imports to comply with US guidelines.

Key Takeaways:

  • The US sanctions on Rosneft and Lukoil, two of Russia's largest oil producers, have global implications, affecting over 5% of the world's oil output.
  • India, a major importer of Russian oil, has suspended imports from Rosneft and Lukoil, with major refiners like Reliance Industries recalibrating their imports to comply with US guidelines.
  • Reliance Industries, the largest Indian buyer of Russian crude, plans to reduce or cease imports of Russian oil and may even halt purchases under its long-term deal with Rosneft.
  • State refiners Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp are reviewing their trade documents to ensure no supply comes directly from Rosneft or Lukoil.
  • The sanctions are expected to affect India's energy supplies, with import bills for refiners potentially increasing by less than 2% on an annual basis.
  • Russia's energy revenues, which account for a quarter of its budget, are likely to take a hit due to the sanctions, with oil and gas revenues expected to decline by 20% year on year in the first nine months of 2025.
  • The sanctions are seen as an attempt to put pressure on Russia, with Putin stating that there will be no self-respecting country that decides to do something under pressure.

Statistics:

  • India has imported nearly 1.7 million barrels of Russian crude per day so far this year.
  • Russia's energy revenues, which come mainly from oil, fell 20% year on year in the first nine months of 2025.
  • Oil and gas revenues account for roughly a quarter of Russia's budget.
  • The US sanctions are expected to affect over 5% of the world's oil output, corresponding to 60% of the Russian oil bought by India.
  • Reliance Industries' long-term agreement with Rosneft involves the purchase of 500,000 barrels of crude oil per day.

Sources:

  • https://www.reuters.com/business/energy/indian-refiners-suspend-russian-crude-purchases-after-us-sanctions-2025-11-19/
  • https://www.bloomberg.com/news/articles/2025-11-19/trump-imposes-sanctions-on-russian-oil-producers
  • https://www.financialtimes.com/2025/11/19/india-suspends-russian-crude-purchases-after-us-sanctions

Read more