Indian Oil Corporation (IOC) confirmed it will maintain imports of Russian crude oil despite fresh US sanctions targeting specific Russian oil companies. The company clarified its position following additional measures from the US last week, which aimed to increase pressure on Moscow by sanctioning entities like Rosneft and Lukoil amid the ongoing Ukraine conflict. These sanctions have led Indian refiners to pause new contracts while they evaluate compliance risks, but IOC’s leadership has underlined that crude purchases will persist if fully compliant with international requirements.
Anuj Jain, IOC Director (Finance), made the company’s stance clear during a recent post-earnings analyst call. He stated, “We are absolutely not going to discontinue (buying Russian crude) as long as we are complying with the sanctions. Russian crude is not sanctioned. It is the entities and the shipping lines which have got sanctions,” reiterating that the legal framework permits continued trade provided the parties and shipping arrangements are not barred.
Jain further clarified the operational approach, noting, “If somebody comes to me with a non-sanctioned entity, and the (price) cap is being complied with, and the shipping is okay, then I will continue to buy it.” This indicates IOC’s commitment to adhering to all specified regulatory limitations while maintaining a stable supply of crude oil from Russia, a key source for the company.
Recent sanctions specifically targeted Rosneft, Lukoil, Surgutneftegas PAO, and Gazprom Neft. India’s largest supplier, Rosneft, manages around 45 per cent of the nation’s Russian crude imports by acting as an aggregator rather than a direct producer—permitting supplies from non-sanctioned entities to Indian refiners. Industry officials highlight that “refiners could still buy Russian crude through non-sanctioned intermediaries, many of which operate from Dubai or Singapore.”
IOC’s chairman, Arvinder Singh Sahney, confirmed, “will abide by all sanctions imposed by the international community,” underscoring the company’s compliance-focused approach. However, he did not comment on whether discounted Russian oil, which made up 21 per cent of IOC’s crude intake last quarter, would be affected in the near term. The broader market is also observing the effect of sanctions on supply channels, with private refiners like Reliance Industries and Nayara Energy expected to experience different impacts depending on their exposure and sourcing strategies.
Despite the restrictions, the economic incentives for importing Russian crude remain strong. Industry officials state that Russia’s discounted oil currently trades at $3.5–5 per barrel below global benchmarks. Market reactions to the sanctions have been muted, with one expert noting, “the market’s muted reaction — with oil prices rising just $2 per barrel after sanctions — suggests traders believe much of the Russian oil will continue flowing through alternative, non-sanctioned channels.”
(With agency inputs)
