Bloomberg: Indian banks ease stance on Russian oil payments

Indian banks are now more willing to finance trade in Russian oil, provided supplies come from non-sanctioned sellers and transactions comply with international sanctions, according to people familiar with the shift. 

The policy adjustment follows the latest round of US sanctions, which took effect on November 21, targeting major Russian producers including Rosneft, Lukoil, Gazprom Neft and Surgutneftegas. These curbs prompted most Indian refiners to avoid placing December orders for Russian crude, Bloomberg reports. 

Sources said Indian banks have now established compliance mechanisms that allow payments for eligible Russian barrels, including transactions in UAE dirhams and Chinese yuan. Lenders and refiners are also carrying out stricter checks on the origin of the oil and the vessels involved, reviewing ship histories and any links to blacklisted entities.

India, a key buyer of Russian crude since Moscow’s 2022 invasion of Ukraine, has alternative supply options but often at higher prices. The discount on Russia’s Urals grade has widened to about $7 per barrel below Dated Brent—up from about $3 before the latest sanctions—boosting interest from cost-sensitive Indian refiners.

Despite the wider discount, refiners remain cautious: any cargo connected to sanctioned companies could lead to frozen payments, arbitration risks or secondary sanctions. While stricter due-diligence may slow bookings, the measures are expected to keep at least some Russian oil deliveries flowing to India.

By Sabina Mammadli