Published by Global Banking and Finance Review
Posted on January 24, 2025
By Nidhi Verma
NEW DELHI (Reuters) - The United States has clarified to India that tankers loaded with Russian oil have to discharge by Feb. 27 under the latest sanctions targeting Moscow's oil revenue, India's oil secretary Pankaj Jain told reporters at an event.
Washington this month imposed sweeping sanctions targeting Russian producers and tankers, disrupting supply from the world's No. 2 producer and tightening ship availability.
"There was a round of clarification by OFAC (the U.S. Office of Foreign Assets Control). Formally they did clarify that Feb. 27 is the deadline," Jain said, in response to a question on the last date for discharging oil from sanctioned vessels.
He said the deadline for completing financial transactions was March 12.
India follows United Nations sanctions, rather than those imposed by individual countries, but fears of secondary sanctions by the United States create operational challenges in securing Russian oil as Indian banks and companies have significant exposure to the U.S. financial system.
India became the top buyer of Russian sea-borne oil sold at a discount after Western nations imposed sanctions on Moscow and curtailed their energy purchases in response to Russia's invasion of Ukraine.
Jain said India would continue to buy Russian oil if it was priced below the $60 per barrel cap set by the Western nations and was sold without the involvement of sanctioned Russian entities and ships.
Oil minister Hardeep Singh Puri said Russian oil accounted for about 0.2% of India's overall crude imports prior to the Ukraine war. Russian oil now accounts for over a third of Indian oil imports.
Indian state refiners are struggling to get Russian oil for March deliver as traders have stopped offering cargoes after the Jan. 10 sanctions from Washington.
Puri said there was no shortage of oil in the market as countries such as Guyana, Brazil, Canada and Suriname were increasing output despite cutbacks by some major producers.
"If Russian oil is available at good discounts we will buy, if it is available elsewhere we will buy from them," he added.
Separately, Puri said Indian oil refiners were looking at setting up three refineries of 400,000 barrels per day (bpd) each, instead of a single 1.2 million bpd refinery in western Maharashtra state, as there were challenges in procuring land.
(Reporting by Nidhi Verma; Editing by Mark Potter)
