Indias Major Oil Refiner Defies U.S. Sanctions, Restarts Russian Crude Purchases

India’s largest state-owned oil refiner, Indian Oil Corp (IOC), has resumed its purchases of Russian crude oil despite U.S. efforts to persuade New Delhi to limit Moscow’s energy revenue, according to a report by Reuters citing traders.

IOC has contracted five shipments of Russian oil set for delivery in December from suppliers not subjected to sanctions. Among these shipments are 3.5 million barrels of ESPO crude, a premium quality oil typically transported from Russia’s Pacific region to Asia.

This decision follows a brief pause in purchases by Indian refiners last week after the U.S. imposed new sanctions on major Russian oil companies Rosneft and Lukoil, part of broader efforts to intensify pressure on the Kremlin regarding its actions in Ukraine.

The U.S. Treasury has set a deadline of November 21 for global buyers to cease dealings with Rosneft and Lukoil.

Prior to this, IOC had canceled seven or eight shipments due to their association with newly sanctioned Russian subsidiaries, as mentioned by the traders.

The finance chief of IOC had previously indicated that the company would persist with its imports as long as they adhered to the imposed sanctions.

Several Indian refiners, including Reliance Industries and Mangalore Refinery, have suspended their purchases while conducting legal reviews.

New Delhi has asserted its right to procure discounted Russian oil, stating that it is vital for the country’s energy security.

However, this situation has strained relations with the United States, which increased tariffs on Indian exports this summer while urging India to curtail purchases that finance Russia’s military endeavors.