Indian state-run refiners are working to settle payments for Russian oil much faster, aiming to complete transactions in just two days instead of five. This move is part of their strategy to finalize deals before the seven-week wind-down period for the latest U.S. sanctions ends on February 27.
The U.S. imposed its toughest sanctions yet on Russian oil last Friday, targeting major companies like Gazprom Neft and Surgutneftegas. The sanctions also affect 183 vessels, oil traders, field service providers, insurance companies, and energy officials.
These sanctions have left millions of barrels of Russian crude oil in transit to India in a risky situation. Currently, about 4.4 million barrels of Russian oil are on their way to India, as tracked by Bloomberg and Kpler. Some of these shipments are on tankers that have now been sanctioned, leaving the fate of the cargo uncertain.
The sanctions include a wind-down period until February 27, allowing businesses to complete transactions with sanctioned entities. However, Indian refiners are keen to finish payments quickly and avoid using sanctioned tankers in the future.
A source from the Indian government confirmed that Indian refiners have already stopped dealing with the Russian companies and tankers sanctioned by the U.S. last Friday. It is believed that a quarter of the Russian “shadow fleet” is now affected by the sanctions.
India does not anticipate major disruptions during the wind-down period, but government officials remain cautious. One source mentioned it is too early to predict the full impact, including how discounts on oil may change or if sellers will accept prices below the $60 price cap set by the U.S.
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