US imposes deadline on Indian imports of Russian oil under new sanctions
The US has set a deadline of February 27 for Indian tankers carrying Russian oil to offload their cargo as part of new sanctions. India faces challenges in securing these imports while adhering to international regulations.
The United States has clarified to India that tankers carrying Russian oil must offload their cargo by February 27 under newly imposed sanctions aimed at curbing Moscow's revenue from oil, India's oil secretary, Pankaj Jain, stated at an event, Reuters reported on January 24.
Washington's recent sanctions target Russian oil producers and tankers, tightening global oil supply and reducing tanker availability.
"There was a round of clarification by OFAC (the US Office of Foreign Assets Control). Formally they did clarify that February 27 is the deadline," Jain explained when asked about the final date for unloading oil from sanctioned vessels. He further noted that the deadline for completing financial transactions related to these shipments is March 12.
India, which adheres to United Nations sanctions rather than those imposed by individual countries, faces operational challenges in securing Russian oil due to potential secondary sanctions from the United States, as reported by Reuters. Many Indian banks and companies have significant exposure to the US financial system, complicating transactions.
India has emerged as the largest buyer of discounted Russian seaborne oil after Western nations imposed sanctions on Moscow in response to its invasion of Ukraine. Jain affirmed that India would continue purchasing Russian oil if prices remain below the 60 USD per barrel cap set by Western nations, provided the oil is sold without the involvement of sanctioned Russian entities or vessels.
According to oil minister Hardeep Singh Puri, Russian oil accounted for just 0.2% of India's total crude imports before the Ukraine conflict. That figure has now risen to over one-third of India's oil imports. However, state refiners in India are finding it challenging to secure Russian oil for March deliveries as traders have stopped offering cargoes following the sanctions imposed by Washington on January 10.
Despite this, Puri dismissed concerns about oil shortages, noting that countries such as Guyana, Brazil, Canada, and Suriname are ramping up production even as some major producers cut output.
"If Russian oil is available at good discounts, we will buy. If it is available elsewhere, we will buy from them," Puri stated.
On a separate note, Puri revealed that Indian oil refiners are considering building three refineries with a capacity of 400,000 barrels per day (bpd) each, instead of a single 1.2 million bpd refinery in Maharashtra. He attributed this decision to difficulties in securing sufficient land for the larger project.
