Oil & Gas

Stricter enforcement of sanctions on Russian crude oil has led to reduced exports to India. The volume of U.S. crude oil flowing to India in April is expected to be the highest since May 2023. The increased enforcement of G7 sanctions and associated payment challenges have delayed Indian purchases of some Russian crude oil shipments. India is poised to import its largest volume of oil from the United States in April in 11 months, as stricter enforcement of U.S. sanctions against Russia has slowed Russian crude oil flows to the world's third-largest crude importer.

In March, Indian refiners, including Bharat Petroleum, Indian Oil Corporation, and Reliance Industries, have already purchased about 7 million barrels of U.S. crude for loading in April, according to unnamed traders cited by Bloomberg. The April volumes of U.S. crude flows to India are expected to be the highest since May 2023, according to Kpler data cited by Bloomberg.

Most of the crude purchased in March for April loadings is WTI Midland, which, while more expensive than some Middle Eastern crude, is comparable to Russia's Sokol grade, the flows of which to India have been most affected by the tightened U.S. sanction enforcement.

The stricter enforcement of G7 sanctions and related payment challenges have caused delays in Indian purchases of certain Russian crude oil cargoes, with tankers previously en route to India turning back eastwards, according to tanker-tracking data monitored by Bloomberg earlier this year.

At the end of last year, the United States adopted a tougher stance on sanctions against Russia and sanctioned several vessels for violating the G7 price cap of $60 per barrel, beyond which cargoes cannot use Western insurance and financing. Some of these tankers were already en route to India loaded with Russia's Sokol grade and departed from Far Eastern ports in Russia.

Now, China has begun purchasing some stranded Sokol cargoes, while India has been exploring other sources for its crude oil supply. In February, India's oil imports from Saudi Arabia, the top crude exporter, rose to a four-month high amid lower Saudi selling prices for last month and tightened sanctions on Russia's crude oil flows.