Sanctions Shake-up: India's Oil Sourcing Challenges Amid US Blockade

US sanctions on Russian oil are disrupting India's oil imports, reducing the availability of cargoes. BPCL, a major Indian refiner, reports a sharp drop in Russian oil supply. Despite discounts on Russian crude, India is exploring alternatives as it shifts focus to the Middle East.

The recent imposition of US sanctions on the Russian oil sector has thrown a wrench into India's oil import strategy. State-owned Bharat Petroleum Corporation Ltd (BPCL) is finding it challenging to secure sufficient Russian oil cargoes for March, affecting its near-term oil supply.

Announced on January 10, the sanctions target key players in the Russian energy sector, including oil producers Gazprom Neft and Surgutneftegas, and this has resulted in a significant reduction in Russian oil availability for Indian refiners. Despite Russia's initial surge as one of India's primary suppliers of crude, sanctions have cut into those numbers sharply.

BPCL Director Vetsa Ramakrishna Gupta indicated that Russian oil, which once formed a substantial part of their imports, will drop drastically. Notably, the once sizable discounts on Russian oil are shrinking, prompting India to consider other sources to fulfill its energy needs.

(With inputs from agencies.)