The world’s largest refinery returns to Russian oil: India adjusts the sanctions pause

Jamnagar Refinery

The world’s largest oil refining company Reliance Industrieswhich owns a giant refinery in Jamnagar, India, has resumed purchasing Russian oil after a pause due to the expansion of US sanctions. Bloomberg reports this, citing sources familiar with the details of the transactions.

According to the agency, Reliance is once again receiving oil from Russia at reduced prices, purchasing barrels from suppliers who formally not subject to sanctions restrictions. Deliveries are carried out by Aframax tankers and sent to processing facilities in the state of Gujarat.

The return of the largest player to the market, as Bloomberg sources note, can significantly soften the decline in Indian oil imports from Russia. Earlier, Indian officials admitted that purchase volumes could be cut by more than half this month.

Against this background, the agency recalls that in recent weeks, tankers with Russian oil have accumulated off the coast of China, and the cost of shipment in Russian ports has dropped to $34 per barrelwhich reflects oversupply and pressure from sanctions risks.

Some Indian refineries indeed temporarily suspended purchases after the introduction of American sanctions against “Rosneft” And “Lukoil” in November. However, the largest state-owned company Indian Oiland also Nayara Energypartly owned by Rosneft, continued importing, emphasizing that they would work with suppliers outside the sanctions lists.

Analysts Goldman Sachs And International Energy Agency indicate that the number of new intermediary companies involved in oil exports from Russia is rapidly growing on the market. If Rosneft and Lukoil reduced supplies by approximately 1.1 million barrels per daythen new market participants almost completely compensated for this volume.

Experts note that the first sanctions of the Donald Trump administration against Russia hit primarily the largest oil companies and were positively received by Ukraine’s Western allies. At the same time, the market itself reacted much calmer, viewing the restrictions as temporary factorand not as a structural break in trade ties.

According to leading FNEB analyst Igor Yushkov, logistics schemes will indeed be revised, but we are only talking about ways to sell oil, and not about refusing to buy it. A similar point of view is expressed by Sergei Vakulenko from the Carnegie Center in Berlin, noting that large Indian and Chinese refineries can only pretend to distancein order to later return to previous volumes when political attention switches to other regions.

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