India Blocks Payments for Russian Oil Imports Amid Sanctions

In a significant move, banks in India have started blocking payments for Russian oil imports. This decision follows a tightening of US sanctions aimed at Russia's energy sector, which stems from President Vladimir Putin's ongoing invasion of Ukraine that has lasted for more than three years.

Notably, state-owned banks, including the State Bank of India and Punjab National Bank, are taking measures to restrict transactions related to Russian oil. In contrast, some private banks have chosen a more lenient approach, possibly awaiting further clarity on the evolving situation.

Recently, the Biden Administration imposed sanctions on several major Russian oil companies and nearly 200 ships that form part of Moscow's shadow fleet, which is involved in transporting oil while circumventing international regulations. As a result, authorities in India have indicated that vessels that are now under sanction will be barred from entering Indian ports after a US grace period concludes on March 12.

India has emerged as the largest importer of Russian oil, accounting for about half of the total seaborne crude exports expected for 2024, with imports reaching approximately 450,000 barrels per day. A significant portion of this oil comes from companies such as Gazprom and Surgutneftegas.

In light of the sanctions, Indian refineries have already started securing agreements to procure crude oil from alternative suppliers, including Oman and the United Arab Emirates. Concurrently, numerous Russian oil tankers around the globe have halted operations as they navigate the complexities introduced by these sanctions.

Moreover, certain port authorities in China, particularly in the eastern Shandong Province, have announced restrictions that will prevent the unloading of Russian oil after March 12.

India, Russia, Sanctions