India's ability to import crude oil from Russia is facing significant challenges due to new sanctions imposed by the Trump administration on major Russian oil companies, Rosneft PJSC and Lukoil PJSC. Analytics firm Kpler has reported that Russian oil constituted over 36% of India's total oil imports this year, highlighting the country's heavy reliance on Russian supplies. This situation has created tensions with the US and complicated trade discussions, especially after the introduction of punitive tariffs in August.

While India has avoided oil from US-sanctioned countries like Iran and Venezuela, Russian oil has remained a viable and cost-effective option. However, following the recent sanctions, Indian refiners are bracing for a potential drop in Russian oil imports, which could fall to nearly zero in the coming months, as indicated by a Bloomberg report.

Refinery executives have expressed concerns that the new US restrictions will effectively halt oil shipments from Russia's largest producers. Before 2022, India's imports from Russia were minimal, primarily relying on Middle Eastern oil. This changed after the Russia-Ukraine conflict and the G7's implementation of a $60-per-barrel price cap aimed at limiting Russia's revenue while ensuring global oil supply.

The sanctions specifically target major Russian oil suppliers, marking a significant shift in US policy. One potential exception is Nayara Energy, an Indian refiner backed by Rosneft, which has been operating solely with Russian crude since the European Union sanctions took effect in July.

As a result of the new sanctions, upcoming orders for November and December are expected to come from alternative sources. Spot negotiations for Urals cargoes have already decreased since mid-October, when Trump claimed that PM Modi assured him India would reduce Russian crude purchases.

Vandana Hari, head of Vanda Insights, noted that Indian refiners may need to adjust their purchases more quickly due to these sanctions. She stated, "India, which began purchasing Russian crude only three years ago, might find it less challenging to adjust compared to China."

The sanctions have also disrupted China's oil sector, with analysts suggesting that the impact of these measures may be mitigated by the use of unofficial financial channels. Rachel Ziemba from the Center for a New American Security emphasized that the key factor will be whether India and China are concerned about the potential for secondary sanctions.

In response to the sanctions, Indian state-run refiners, including Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp, and Mangalore Refinery and Petrochemicals, are conducting thorough reviews of their documentation related to Russian oil procurement to ensure compliance with US sanctions. Reliance Industries is also considering reducing or halting its Russian oil imports, with a spokesperson stating, "Recalibration of Russian oil imports is ongoing and Reliance will be fully aligned to GOI (Government of India) guidelines."