Following Friday’s U.S. sanctions against tankers shipping Russian oil, India expects its flows of crude from Russia not to be disrupted until March as the sanctioned tankers will be allowed to discharge until then, a senior Indian government official told Reuters on Monday.
India will allow cargoes carrying Russian oil booked before January 10 to discharge at ports when they arrive at Indian coasts, according to the official who spoke on condition of anonymity.
The outgoing U.S. Administration on Friday imposed the most severe sanctions on Russia’s oil yet, designating two major Russian oil companies, Gazprom Neft and Surgutneftegas, as well as 183 vessels, dozens of oil traders, oilfield service providers, insurance companies, and energy officials.
A large part of the newly sanctioned tankers by the U.S. have carried Russian crude mostly to China and India over the past year, according to analysts and ship-tracking data.
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The latest U.S. sanctions have already started moving oil markets and the oil-purchasing strategies in Russia’s top crude oil customers, China and India.
Oil prices jumped on Friday as the U.S. sanctions were announced, and Brent Crude broke above $80 per barrel to hit the highest level in three months.
The rally continued on Monday, with Brent jumping to a four-month high of over $81 per barrel.
Prices will eventually fall back below $80 per barrel because there is no shortage of supply on the global oil market, the anonymous Indian government official told Reuters.
“The market is waiting for Russia to respond on sanctions, the official told the newswire, adding that “Russia will find ways to reach us.”
India is bracing for a major disruption to Russian oil supply, which is currently the single largest source of crude for the world’s third-largest oil importer.
Over the past two years, India has become a key buyer of Russia’s oil, while the attractiveness of cheaper crude supply has made Russia the single biggest supplier of oil to India.
By Tsvetana Paraskova for Oilprice.com
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1- Russia was able over to nullify US and Western sanctions against it, dominate the global energy markets, overtake Japan's and Germany's economies to become the world's fourth-largest economy after China, the US and India based on purchasing power parity (PPP), frustrate America's heinous plans of waging war on Russia in order to weaken it and prevail in the Ukraine.
2- China and India don't recognize Western sanctions against Russia and they will ignore the new sanctions as they have been ignoring the already existing ones. Unlike China which does exactly what it says, India must be judged by what it does rather than by what it says.
3- The current rise in oil prices has nothing to do with the new sanctions since the price recovery started towards the end of December 2024.
4- OPEC+ has no plans for rolling back its current production cuts until Brent crude oil price rises above $85 a barrel being the minimum price the majority of OPEC+ members needs to balance their budgets.
5- 2025 will see much higher oil prices than 2024 because of many bullish factors joining hands coming to support prices.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert