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Informist, Thursday, Nov. 20, 2025

 

By Pallavi Singhal

 

NEW DELHI – India's crude sourcing patterns are set for a change in the near term as US sanctions on Rosneft and Lukoil come into effect Friday, prompting refiners to reassess exposure to designated Russian entities, according to global trade analytics firm Kpler.

With crude linked to Rosneft and Lukoil effectively treated as a "sanctioned molecule", Indian refiners — except for Nayara Energy — are expected to pause direct purchases after the deadline due to elevated compliance risks, according to Sumit Ritolia, lead research analyst, refining and modelling at Kpler. As a result, he expects "a noticeable drop" in Russian crude flows to India in the near term, particularly through December and January. He said that Russian supply will not disappear but instead move through more opaque channels involving intermediaries, blended barrels and more complex logistics.

 

Recent tanker movements reflect this transition, he said. "There has been a rise in mid-voyage diversions between India and China and ship-to-ship transfers at unusual locations such as off Mumbai's coast, far from typical transfer hubs near the Singapore Strait." These trends, he noted, highlight "evolving logistical tactics by Russian exporters navigating tightening Western sanctions".

 

In the run-up to the deadline, arrivals remained elevated. India's crude import trends for November are already showing a sharp rise from October, driven primarily by refiners' efforts to secure economical Russian barrels ahead of the Nov. 21 US sanctions deadline. According to the latest Kpler shipment data, India imported 1.90 million barrels per day of Russian crude so far in November, significantly higher than October's 1.62 million barrels per day. "Based on current understanding, no Indian refiner other than Nayara's already-sanctioned Vadinar facility is likely to take the risk of dealing with US Office of Foreign Assets Control-designated entities," he said, adding that buyers will need time to reconfigure routing, ownership structures, contracts and payment systems after Nov. 21.

 

"The outlook beyond the deadline will depend on how strictly secondary sanctions are enforced and whether additional measures — such as sanctioning all Russian barrels or penalising refineries processing Russian crude are introduced," Ritolia said. Tighter enforcement would further suppress Russian volumes, while lighter implementation could enable some recovery through intermediaries, he said.

 

Russian loadings bound for India in November point to emerging caution. Ritolia said shipments are tracking at 982,000 barrels per day through Nov. 20 — the lowest since October 2022 and sharply below the 1.75 million barrels per day average seen during January–September. While some in-transit cargoes could still revise destinations, the trend indicates softening India-bound flows. Ritolia added that there has been a noticeable rise in undisclosed cargoes leaving Russian ports, many of which historically discharged in India, indicating that some flows may be continuing through less transparent channels. 

 

Ritolia noted that the sanctions target specific companies rather than all Russian crude, meaning India can legally continue importing from non-designated suppliers such as Surgutneftegaz and Gazprom Neft — provided no sanctioned intermediary, vessel, bank or service provider is involved. However, he warned that operational risks remain elevated and that such suppliers "may not fully replace Rosneft and Lukoil barrels in the near term" given the dominant role those companies play in Russia's export blend slate.

 

To offset any near-term decline in Russian supply, refiners are expected to increase intake from a broader mix of suppliers. According to Ritolia, Indian refineries are highly complex and technically capable of processing diverse grades, meaning the substitution challenge is primarily economic rather than operational. He said refiners are likely to raise inflows from West Asia — including Saudi Arabia, Iraq, the UAE and Kuwait — as well as from Brazil, Colombia, Guyana, West Africa, the US, and Canada. However, longer voyage times and higher freight costs on long-haul routes may limit the extent of substitution.

 

PRE-SANCTIONS STABILITY

India's crude imports in October stood at 4.81 million barrels per day, around 3% higher than in September, according to Kpler data. Russia remained the top supplier at 1.62 million barrels per day, accounting for roughly 34% of total imports. US crude oil shipments to India jumped threefold in October to 568,000 barrels per day, the highest since March 2021. Flows from the US in November are so far averaging 536,000 barrels per day.

 

Ritolia said the sharp rise in US arrivals was driven by arbitrage economics rather than sanctions-driven rerouting. "These barrels were likely agreed before the recent US sanctions on Rosneft and Lukoil, given voyage times of around 45–55 days," he said.

 

According to Ritolia, further upside in US flows will be limited by freight costs, voyage time and the lighter yield of West Texas Intermediate.

 

Despite the volatility expected after Nov. 21, Ritolia said a complete halt in Russian imports appears unlikely. "Unless refiners themselves face direct sanctions or the Indian government imposes formal restrictions — both low-probability scenarios — Russian barrels will keep flowing, albeit through increasingly diversified and less transparent channels," he said.  End

 

Edited by Saji George Titus

 

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