With US sanctions’ shadow on Rosneft, Lukoil, little-known intermediaries step in to supply Russian crude to India

As a result, the Russian oil imported into India in December has fallen to a three-year-low of around 1.2 million barrels per day (bpd), down from 1.8 million bpd in November. Russia has been India’s largest source of crude oil for over three years now. It earlier used to only be a peripheral oil supplier to India, but with much of the West shunning Russian oil following its February 2022 invasion of Ukraine, Moscow started offering its oil at a discount and import-dependent Indian refiners started lapping up the barrels. India and China have been the top destinations for Russian crude in recent years.

Experts believe that with new entities entering the market, Russian oil volumes reaching Indian ports would gradually recover, as long as the US doesn’t go after these new players or target them or Indian buyers with secondary sanctions. To be sure, unlike Iran and Venezuela, whose oil is under US sanctions, Russian oil is not sanctioned by Washington; only a few Russian oil companies like Rosneft and Lukoil are.

This essentially means that Indian refiners can continue to buy Russian crude as long as no sanctioned entity, vessel, bank, or service provider is involved, and if the seller can provide documentary proof that the oil is not sourced from the sanctioned players. The threat of secondary sanctions from the US is the reason why countries like India, while politically opposed to unilateral economic sanctions, usually steer clear of countries and other entities sanctioned by Washington. While primary sanctions—on Rosneft and Lukoil, in this case—mainly curtail or prohibit the engagement of American citizens and entities with sanctioned entities, secondary sanctions seek to limit the engagement of other countries and their entities with the target country or entity.

“December’s headline drop (in India’s Russian oil imports) only tells part of the story. Beneath the surface, Russian crude flows into India are increasingly being rerouted through a growing web of intermediaries, traders, and logistical workarounds. While direct purchases have softened, the underlying demand signal remains intact. Russian barrels are expected to retain a structural presence in India’s crude slate, supported by pricing economics, refinery compatibility, and limited near-term alternatives,” said Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler.

“Despite mounting sanctions pressure, Russia’s export system continues to demonstrate notable adaptability—building new intermediary structures, shifting trading hubs, and rerouting flows through flexible logistics networks. As supply chains re-establish and Indian refiners respond to supportive economics, Russian crude loadings to India are expected to recover gradually,” Ritolia said.

As of December 30, Russian oil loadings for Indian ports stood at 1.3 million bpd, down 12.3 per cent from November. At over 244,000 bpd, Redwood Global Supply FZE dispatched the most Russian oil volumes to India, followed by Alghaf Marine DMCC with over 184,000 bpd, and RusExport with almost 158,000 bpd. Rosneft dispatched just around 122,000 bpd to India this month, down from almost 807,000 bpd in November, while Lukoil’s loadings for India stood at a little over 98,000 bpd. Other players like Ethos Energy, Arcadia International FZE, Rosewood Resources, and Vistula Delta also dispatched Russian oil to India in December.

According to experts, December loading data of Russian crude for India could be revised upwards over the coming weeks. This is because several vessels are currently heading toward Asia without a declared final destination, which is often a signal that they could transit through the Suez Canal. Historically, such cargoes have updated their discharge destinations mid-voyage, and India has frequently emerged as the end buyer. Vessel-tracking data shows a rise in cargoes departing Russian ports without declared discharge locations. Many of these tankers have discharged their previous two to three cargoes at Indian refineries, suggesting India remains a strong potential outlet for at least some of those cargoes.