Indian Oil Corporation (IOC), India’s largest refiner, has procured five cargoes of Russian crude for December delivery from non-sanctioned suppliers, according to trade sources. The decision marks IOC’s cautious resumption of Russian oil purchases following heightened U.S. sanctions targeting Moscow’s energy sector.

The latest sanctions, imposed by Washington on major Russian oil producers Rosneft and Lukoil, are part of a broader strategy to pressure the Kremlin to halt its military operations in Ukraine. These measures have prompted several Indian refiners, including Mangalore Refinery and Petrochemicals Ltd (MRPL), HPCL-Mittal Energy Ltd, and Reliance Industries, to temporarily suspend purchases of Russian crude.

IOC, however, appears to have taken a more calibrated approach. The company’s finance head, Anuj Jain, stated earlier that IOC would continue sourcing Russian oil as long as the trades comply with existing international sanctions. This stance underscores India’s pragmatic energy security strategy, balancing geopolitical sensitivities with domestic fuel demands.

Trade sources indicate that IOC bought about 3.5 million barrels of ESPO-grade crude at near-parity with Dubai benchmark prices for delivery to an eastern Indian port in December. The identities of the sellers remain undisclosed. The firm reportedly cancelled seven to eight shipments earlier this month after discovering that those consignments were linked to subsidiaries of sanctioned Russian entities.

Russia’s ESPO crude, usually exported from the Pacific port of Kozmino, has historically been directed to Chinese buyers. However, following U.S. sanctions, China’s state refiners have halted such imports, and private refiners have drained their import quotas. The resulting fall in demand has pushed ESPO prices lower, offering Indian refiners an opportunity to secure discounted barrels.

Since 2022, India has emerged as the largest purchaser of Russian seaborne crude, attracted by significant price discounts necessitated by tightening Western sanctions and shipping constraints. Yet, growing diplomatic pressure from Washington and European capitals continues to challenge New Delhi’s balancing act between securing affordable energy and maintaining strategic autonomy.

IOC did not provide an official comment regarding the latest purchase. Industry analysts note that these developments highlight India’s strategy of diversifying energy sources while ensuring compliance with evolving global sanction frameworks.

Geopolitical Analysis: Impact On India–U.S. Energy Relations

Indian Oil Corporation’s renewed purchase of Russian crude from non-sanctioned firms reflects New Delhi’s ongoing challenge of managing energy security without provoking diplomatic friction with the United States. While technically compliant with international sanctions, the move may test Washington’s tolerance for India’s continued engagement with Russia’s energy market.

The Biden administration and now President Trump’s government have both pressured global buyers to limit Russian oil imports as part of the Western strategy to curb Moscow’s war financing. However, India’s energy dependence and its long-term refinery contracts require consistent supply, which discounted Russian crude helps sustain.

Diplomatic observers suggest that Washington is likely to adopt a measured response. The U.S. understands India’s strategic necessity but may seek assurances that such transactions remain within the legal framework and do not indirectly support sanctioned Russian producers or their subsidiaries.

At the same time, India’s decision underscores its foreign policy independence, often described as “strategic autonomy.” By purchasing from non-sanctioned intermediaries, New Delhi preserves crucial energy access while signalling to Western partners that it will not compromise on national economic interests.

Analysts expect the U.S. to continue promoting diversification of India’s import basket, possibly through deeper cooperation on U.S. crude and LNG supplies. Strengthened energy trade could help offset the geopolitical tension surrounding Russian imports, maintaining India’s critical role in Washington’s Indo-Pacific strategy.

IDN (With Agency Inputs)