US sanctions against two of Russia's largest oil companies are expected to impact Reliance Industries' crude imports from Russia, while state-run refiners may continue purchases through intermediary traders for now.
Industry sources said public-sector units are assessing compliance risks but are unlikely to halt Russian crude flows immediately as they buy almost all of their needs from traders, mostly European (who are out of the sanctions net).
Billionaire Mukesh Ambani's Reliance Industries Ltd - India's largest buyer of Russian crude, accounting for roughly half of the country's 1.7 million barrels per day of imports from Moscow - may however have to recalibrate its imports as it buys crude oil directly from Russia's Rosneft, they said.
Reliance had in December 2024 signed a term deal with Russia's Rosneft - now sanctioned - to import as much as 500,000 barrels per day of Russian oil for 25 years.
It also buys oil from intermediaries.
The company did not immediately respond to an email sent for comments.
The US Department of the Treasury's Office of Foreign Assets Control (OFAC) imposed further sanctions on Open Joint Stock Company Rosneft Oil Company (Rosneft) and Lukoil OAO (Lukoil) - Russia's two largest oil companies that the Trump administration accuses of helping fund the Kremlin's "war machine" in Ukraine.
The two companies together export 3.1 million barrels of oil per day.
Rosneft alone is responsible for 6 per cent of global and nearly half of all Russian oil production.
India became the largest purchaser of Russian crude since Moscow's 2022 invasion of Ukraine, capitalising on steep discounts that followed Western buyers' withdrawal.
Russian oil is bought both by private sector firms - Reliance Industries Ltd and Rosneft-backed Nayara Energy - and state-owned refiners Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), Mangalore Refinery and Petrochemicals Ltd and HPCL-Mittal Energy Ltd (HMEL).
State-owned refiners do not have any term or fixed quantity deal with either Rosneft or Lukoil and typically buy Russian oil through tenders.
In these tenders, oil traders, mostly European or ones based in Dubai and Singapore, who had purchased oil from Russian entities, participated.
These traders have not been sanctioned by the US, sources said adding European Union sanctions too had not targeted these traders.
And even if some traders shy away from picking Russian volumes, Moscow is capable of overnight resurrecting new ones with Dubai registration, sources said, adding these traders can buy oil from Russian firms and sell to refiners such as those in India and China.
"The measures by the Trump administration are 'half-hearted'," a source involved in the business said.
"For months, US President Donald Trump has resisted pressure from US lawmakers to impose energy sanctions and even now the ones who do bulk of the trade are out of its net."
Another source said the markets are somehow not buying into Trump's latest sanctions.
"If sanctions were so impregnable, international oil prices would have jumped at least USD 5-10 per barrel on news of such large volumes going out of the market.
Instead what we saw was just a USD 2 per barrel increase, implying the market believes not all of the oil that is exported from Russia is going anywhere."
Nayara Energy, in which Rosneft holds a 49.13 per cent stake, is the other big private sector buyer of Russian oil.
The company, which operates a 20 million tonnes a year oil refinery at Vadinar in Gujarat, has already been sanctioned by the European Union and it may have to recalibrate its purchases, sources said.
Nayara did not respond to an email seeking comments.
Kesani Enterprises Company Limited - a consortium led by Mareterra and Russian investment group United Capital Partners (UCP) - holds another 49.13 per cent stake in Nayara.
Sources said the Indian government has not so far given any instruction to refiners on stopping or reducing Russian oil imports.
They said Trump's recent comments on India agreeing to stop all purchases of Russian oil (with no such commitment being made by New Delhi) may have got to do with the European Union (EU) sanctions on import of fuel made from Russian oil.
The EU has banned import of fuels refined from Russian crude with effect from January 21 next year.
Reliance, whose one of the two refineries is only-for-export, refines Russian crude into fuels like petrol and diesel, some of which is exported to the EU.
MRPL also exports to the EU.
From January, such exports will have to stop and in a way Reliance and MRPL will have to cut Russian oil purchases if they have to continue to export to EU, they said adding Nayara has already stopped fuel exports to EU after being sanctioned.
With three big buyers of Russian oil recalibrating their purchases, Russian flows will reduce by January and this is something that Trump may be using as a bargaining chip to beat around his point, they added.
