NEW DELHI, Oct 27: Indian Oil Corporation (IOC), the nation’s biggest oil company, will comply with all applicable sanctions, Chairman Arvinder Singh Sahney said on Monday, steering clear of remarks on purchases from Russia.
Indian refiners are likely to scale back on the import of Russian oil to avoid secondary sanctions on shipping and banking after the US imposed fresh sanctions with a view to curbing Moscow’s earnings from oil sales.
“We will abide by all sanctions imposed by the international community,” he said.
He, however, refused to comment on the IOC’s purchases of Russian oil.
Russian oil made up for 21 per cent of the crude oil IOC imports during April-September.
IOC’s subsidiary Chennai Petroleum Corporation Ltd (CPCL) has halved Russian oil imports this month, coinciding with the fresh sanctions the US imposed on Russian oil.
US President Donald Trump, late October 22, imposed sanctions on Russia’s Rosneft and Lukoil, in a bid to pressure Moscow into ending its war on Ukraine. A day later, the European Union imposed full transaction bans on Rosneft and Russian gas firm Gazprom Neft.
While the Indian government has not officially responded to the sanctions announced by the US, industry sources said Indian refiners’ import strategy would largely depend on how banking systems respond to the latest restrictions.
Reliance Industries Ltd, which has a 25-year term contract with Rosneft to buy up to 5,00,000 barrels per day of crude and is India’s largest importer of Russian oil, may be the first company to stop importing oil from Moscow.
Last week, Reliance pledged full compliance with the Western sanctions on Russian crude imports while expressing confidence that its diversified sourcing strategy will maintain operational stability.
The company, which operates the world’s largest refining complex at Gujarat’s Jamnagar with 1.24 million barrels per day capacity, said it will adapt its refinery operations to meet new compliance requirements following restrictions announced by the EU, UK and the US.
Rosneft-backed Nayara Energy, which is currently dependent solely on Russian oil after supplies from elsewhere dried up due to sanctions by the European Union, has very few options.
A potential disruption in discounted Russian Urals supplies could trim Indian refiners’ gross margins, with the grade making up roughly 40 per cent of their crude slate.
Indian refiners have started diversifying their crude import baskets in the third quarter, importing larger volumes from Colombia, Canada and the Middle East as inflows from Russia dipped. India’s Russian crude imports in July-September averaged 1.68 million bpd, a 13 per cent decline compared to Q2.
Long reliant on Middle Eastern oil, India began importing large volumes of steeply discounted Russian crude in 2022 after Western sanctions restricted Moscow’s traditional markets. At one point, Russian oil made up about 40 per cent of crude that Indian refiners processed and turned into fuels like petrol and diesel.
Russia currently supplies about a third of India’s crude imports, averaging around 1.75 million barrels per day (mbd) in 2025, of which approximately 1.2 mbd came directly from Rosneft and Lukoil. Most of these volumes were bought by private refiners, Reliance Industries Ltd and Nayara Energy, with smaller allocations to state-owned refiners.
Despite tightened sanctions and the US slapping a steep 50 per cent tariff on Indian goods, India’s imports of Russian crude between January and September 2025 were only 4.6 per cent lower than 1.83 million bpd a year earlier.
Russian crude flows are expected to remain in the 1.6-1.8 mbd range until November 21, but direct volumes from Rosneft and Lukoil are likely to decline thereafter, as Indian refiners seek to avoid any risk of US sanctions, Sumit Ritolia, Lead Research Analyst (Refining and Modelling) at Kpler, said last week.
The discount on Russian oil has shrunk, in part because shipping between the countries has become more efficient. (PTI)