IOC to keep buying Russian oil from unsanctioned firms

State-run refinery Indian Oil Corporation will not stop buying Russian oil as long as it complies with the latest US sanctions. Other Indian refineries may well follow the same plan, considering the fact that the recent sanctions target specific Russian firms Rosneft and Lukoil, not the oil itself.

Speaking at an IOC post-earnings analyst call today, IOC Director (Finance) Anuj Jain explained the position, saying the company would “absolutely not” stop buying Russian crude. “We are absolutely not going to discontinue (buying Russian crude) as long as we are complying with sanctions. Russian crude is not sanctioned. It is the entities and the shipping lines that face sanctions,” he said.

“If somebody comes to me with a non-sanctioned entity, the (price) cap is being complied with and the shipping is okay, then I will continue to buy it,” said Jain. The IOC is India’s largest refiner.

The rationale behind IOC’s position is that the US sanctions are on specific Russian companies, rather than the oil itself. This leaves room for Russian oil purchases from non-sanctioned entities.

“The current scenario with Moscow is not like with Venezuela or Iran, currently under full US sanctions. India does not buy oil from these countries because these are sanctioned. In Moscow’s case, two firms have been sanctioned,” said an official source as Indian refiners halted placing new orders for Russian oil and formulated alternative strategies.

Russian oil major Lukoil, meanwhile, in a statement said it would sell overseas assets. “Owing to the introduction of restrictive measures against the company and its subsidiaries by some states, the company announces its intention to sell its international assets. The bidding process has started,” the statement said.

Rosneft and Lukoil, which account for 55% Russian oil, have been placed on US’ Specially Designated Nationals (SDN) list of sanctioned entities. Many countries follow this list, which prohibits them and their banks from doing business with the sanctioned entities. About Rosneft, the largest oil supplier to India (making up for 45% of inflows), officials said it was an aggregator, not a producer. “Crude aggregation from Russian fields can be done by non-sanctioned firms and supplies to India can continue,” said a source.

At the recent Berlin Global Dialogue, Union Commerce Minister Piyush Goyal had said that while Germany secured US exemption from sanctions citing the presence of a Rosneft subsidiary in the European nation, “India was being singled out”. “India also has a Rosneft subsidiary,” Goyal had said, indicating that New Delhi may approach the US for Germany-like exemptions.

In the midst of these developments, official sources have said ways to get more US oil are also being explored. As per FY 2025 data, India on an average bought $13 billion dollar worth of energy from the US.

Commerce ministry sources say there is scope for raising oil purchase from the US. At the heart of the ongoing India-US tensions is the $42.7 billion trade surplus that India has in its ties with the US.