New Sanctions Pressure India to Halt Russian Crude Purchases
India is reportedly planning to sharply reduce its crude oil imports from Russia, a move that would mark a significant shift in its energy policy. This change comes in direct response to fresh sanctions imposed by the United States and Europe. Russia is currently India's biggest oil supplier. The news immediately rattled global energy markets, causing oil prices to jump by nearly 3% on Thursday over fears of a new supply disruption.
Key Refiners Reassess Purchases
The potential pivot is being led by India's top private refiner, Reliance Industries. Media sources indicate the company plans to "significantly cut or completely halt" its crude imports from Moscow. State-run refiners are also actively reassessing their purchasing plans. They are reviewing supply chains to ensure they do not violate the new, tighter restrictions.
This sudden re-evaluation was triggered by a new round of Western sanctions. The US and its allies have targeted major Russian energy firms, including Rosneft and Lukoil. The European Union has also approved a 19th sanctions package, which includes a ban on imports of Russian liquefied natural gas (LNG).
Global Markets React to Supply Fears
The global oil market reacted instantly to the news from India. Brent crude futures rose by 3.1% to $64.53 per barrel, and U.S. West Texas Intermediate (WTI) crude saw a similar 3.2% increase. The price surge was driven by market fears that these tighter sanctions could finally choke off the flow of Russian oil.
Analysts noted that if India, a massive buyer, steps away from Russian crude, it could significantly disrupt global supply chains. This would force Asian demand to pivot toward other sources, such as U.S. crude. Such a shift would, in turn, lift oil prices in the Atlantic market.
A Reluctant Shift from a Top Supplier
This move marks a major reversal for India. In the past two years, Indian refiners had dramatically increased their imports of Russian crude. They secured substantial discounts as Western buyers backed away after the invasion of Ukraine. This strategy allowed India to secure its energy needs at a cheaper rate.
However, the increasing pressure from the US and the growing list of sanctions have forced a policy change. Indian refiners may now be compelled to shift their focus back to alternative suppliers, most likely in the Middle East and Africa.
Uncertainty in the Long-Term Outlook
Despite the immediate market reaction, some experts remain cautious about the long-term impact. Analysts pointed out that nearly three years of previous sanctions have largely failed to stop either Russia's oil production or its revenues. Russia has found ways to move its oil, and buyers, particularly in India and China, have continued to purchase it. Some see the current price jump as a "knee-jerk reaction" rather than a permanent structural shift. The market is now closely watching OPEC+ production levels and the ongoing conflicts in Ukraine and the Middle East to determine the next major price trend.
