Washington’s latest sanctions on Russia’s oil giants, Rosneft and Lukoil, mark the first punitive action by the Trump administration since its return to office in early 2025. The move, announced by the US Treasury on Wednesday, is viewed as part of a broader strategy to tighten restrictions on Moscow’s revenue streams while indirectly reshaping global energy flows, reported TASS.

Indian analysts believe, however, that the sanctions will not rupture the evolving Russia–India–China energy network that has emerged over the past three years. 

According to Dr. Hriday Sarma, a noted geo-economic analyst and former Visiting Fellow at INSS and MP-IDSA, the impact will be limited to short-term trade adjustments rather than structural disruptions.

He explained that Indian refiners — including Reliance Industries Limited (RIL) and state-run oil firms — have begun a compliance review to confirm that imports do not directly involve sanctioned Russian entities. Yet, trade in Russian-origin oil is not expected to halt altogether. A Reliance spokesperson reaffirmed the company’s adherence to Government of India guidelines during this transitional phase.

Sarma noted that India’s demand for affordable energy, driven by rapid economic expansion, makes a complete disengagement from Russian crude infeasible. Instead, he suggested, the latest restrictions could accelerate diversification in settlement systems — prompting the use of the Chinese yuan or Indian rupee in cross-border energy payments. This evolution would reduce dependence on the Western-dominated financial mechanisms targeted by Washington.

The sanctions, set to take effect on 21 November, also reveal an attempt by the US to channel Asian energy trade away from discounted Russian supplies toward costlier Western alternatives. According to Sarma, this reflects Washington’s broader goal of “weaponising its financial dominance” and capturing lost market share under the pretext of moral obligation and strategic diversification.

He added that American LNG exports have already surged into Europe following the Ukraine conflict, transforming the continent into a captive market for US energy at premium prices. A similar effort now appears to be underway across Asia, as Washington promotes its own suppliers while penalising competitors.

Commenting on the European Union’s 19th anti-Russian sanctions package, also unveiled on Wednesday, Sarma warned of economic blowback within Europe. Nations such as Germany and Hungary, which continue to depend on Russian-origin energy through intermediaries like India and Turkey, risk further inflation and supply instability as indirect channels are disrupted.

Brent crude prices have already risen nearly 5%, reaching $65.65 per barrel after President Trump’s announcement. Sarma characterised this as an “early signal” of the sanctions’ self-defeating consequences. In his view, the policy ultimately imposes a “loyalty tax” on America’s allies — compelling them to shoulder higher energy costs while Washington consolidates its strategic and commercial advantage.

Agencies