In a strategic move to maintain energy supplies, Indian Oil Corp (IOC) has purchased five cargoes of Russian oil from non-sanctioned firms for December delivery, even as U.S. pressure on New Delhi to curb energy trade with Moscow continues to mount.
Indian Refiner Secures 3.5 Million Barrels of ESPO Crude
According to traders cited by Reuters and The Economic Times, the IOC has acquired around 3.5 million barrels of Russia’s premium-grade ESPO (Eastern Siberia–Pacific Ocean) crude. The deal, priced close to Dubai benchmark levels, will see the oil delivered to India’s eastern port in December. The sellers were not disclosed.
“IOC’s recent deals were made exclusively with non-sanctioned companies,” one market source told Reuters, noting that the refiner has been cautious since new U.S. restrictions came into force.
U.S. Sanctions Prompt IOC to Cancel Earlier Shipments
Following the October 22 announcement of new U.S. sanctions against Rosneft, Lukoil and their subsidiaries, Indian refiners were forced to review their procurement policies. Two Reuters sources said IOC canceled seven to eight shipments of Russian crude supplied through newly sanctioned entities.
The U.S. Treasury Department allowed one month for companies to wind down existing operations with targeted firms, stating that the sanctions were introduced due to “Russia’s lack of genuine interest in the peace process.”
India Reviews All Russian Oil Contracts
In the wake of the sanctions, Indian state-owned refiners, including IOC, began reviewing trade documentation to ensure that their oil purchases were not linked directly to sanctioned Russian companies. According to Bloomberg, Indian refineries temporarily suspended trading in Russian Urals crude pending government guidance and assessment of alternatives.
Market Reaction: ESPO Prices Fall
The price of ESPO crude has reportedly declined as Chinese refiners canceled several planned purchases following the sanctions. The downturn created opportunities for Indian buyers to secure additional volumes at favorable prices.
Washington’s Pressure on New Delhi
In early August, the U.S. imposed a 25% import tariff on Indian goods in response to continued purchases of Russian oil. On October 15, President Donald Trump stated that Prime Minister Narendra Modi had assured him during a phone call that India would stop buying Russian crude. A week later, Trump added that Modi had agreed to “limit purchases” rather than halt them entirely.
Russia Calls Sanctions Illegal
The Kremlin has repeatedly called the sanctions “illegal” and asserted that Russia has developed a degree of resilience against them. Russian officials described Washington’s demands toward India as “de facto threats.”
“India will suffer losses of $9–10 billion if it refuses Russian energy supplies,” President Vladimir Putin warned, adding that the economic damage from U.S. tariffs would be roughly the same.
Energy Tensions Continue
India remains one of Russia’s key oil customers despite U.S. restrictions. Analysts say New Delhi’s balancing act between securing affordable energy and maintaining strategic relations with Washington will remain a defining feature of its foreign policy in the months ahead.
