Even if the US sanctions on Rosneft and Lukoil might completely change India’s crude oil import strategy, there will likely be a lot of agreements with refiners in the next 30 days as they fill up their cargoes from Moscow. More than 70% of Russia’s crude exports to India come from the two oil giants.
The two oil giants will be subject to sanctions imposed by the US Office of Foreign Assets Control (OFAC) on November 21, 2025. This is President Donald Trump’s first significant move against Russia in his second term.
Short-term consequences
“India will see near-term consequences as sanctions essentially make Russian oil molecules — at least from these two firms — into a sanctioned commodity, altering the market dynamic from one of influence to enforcement,” according to Kpler, a global real-time data and analytics company.
Russia presently provides about one-third of India’s crude imports, with an average of 1.7 million barrels per day (mb/d) in 2025, of which more than 1.2 mb/d came directly from Rosneft and Lukoil, according to Sumit Ritolia, Lead Research Analyst for Refining & Modeling at Kpler.
He noted that PSU refiners Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation received lower shares of these quantities, while the majority went to private refiners Reliance Industries (RIL) and Nayara Energy.
Up until November 21, Russian crude shipments are predicted to stay between 1.6 and 1.8 mb/d; however, after that, direct volumes from Rosneft and Lukoil are probably going to drop as Indian refiners try to minimize the possibility of OFAC-related penalties. However, refiners will still get Russian grades via unapproved third-party middlemen, but with more vigilance, Ritolia told Businessline.
Impact of sanctions
According to GTRI founder Ajay Srivastava, Rosneft and Lukoil are responsible for around 57% of Russia’s oil production and export revenue. Technically, the remaining 43%, which is generated by other companies, is still not recognized. Theoretically, international customers might continue to purchase from these unapproved businesses without going against US regulations.
But is India included in this flexibility? Apparently not. Washington has accused New Delhi of “fueling the conflict” by importing Russian oil, and has put an extra 25% tax on Indian shipments. Any Russian-origin petroleum, even barrels acquired lawfully, is subject to the penalty, not only oil from sanctioned firms like Rosneft or Lukoil. “No other nation is subject to such a broad punishment,” he said.
Ritolia emphasized that despite the short-term volatility, a total prohibition on Russian crude imports by Indian refiners is still very improbable due to the attractive margins and geopolitical position.
“Russian oil will continue to flow to India, although via more intricate financial, logistical, and trading arrangements, until Indian refineries themselves are sanctioned or the Government of India publicly prohibits Russian crude – both implausible situations,” he said.
Due to the impact on its term contracts with Rosneft, Ritolia clarified that RIL would have to switch to third-party spot purchasing and restructure its supply and finance chains in order to comply with OFAC regulations and preserve business continuity.
Expect Nayara Energy, which is already subject to sanctions, to keep importing Russian oil. It is doubtful that Nayara’s operations and sourcing pattern would alter much unless New Delhi intervenes directly.
In a broader sense, the architecture of penalties is become more interrelated. Targeting ports, refineries, terminals, payment channels, suppliers, and transportation mediums increases compatibility among sanctioned companies and strengthens their reliance, Ritolia said.
Taking the place of Russian barrels
In terms of technicality, Ritolia said that India’s refining system is one of the most adaptable in the world and can handle different grades of crude oil. The operational difficulty is low, however. The larger problem is the economic trade-off (loss of discounts).
Refiners might gradually increase their imports from the US, Latin America (Brazil, Guyana, Mexico), West Africa (Nigeria, Angola), and the Middle East (Saudi Arabia, United Arab Emirates, Iraq) in the near future.
Diversification is technically possible but not cost-neutral since India already has term contracts or spot procedures and logistics in place for the majority of these locations. I think energy security is the main priority right now, but refining economics is also important,” Ritolia said.