FT: Indian steel tycoon’s energy venture bought Russian oil via blacklisted ships

Steel magnate Lakshmi Mittal’s energy joint venture in India has purchased Russian oil transported on vessels previously blacklisted under international sanctions, according to an analysis of satellite imagery, shipping data, and customs records by the Financial Times.

The Guru Gobind Singh Refinery in Punjab, co-owned by Mittal Energy, received at least four crude shipments this year valued at nearly $280 million.

Most of the oil had been carried from Russia on US-sanctioned ships before being transferred onto the tanker Samadha for the final leg to India. The Samadha itself is not subject to US sanctions but is blacklisted by the European Union.

All ships involved reportedly attempted to obscure their activities, either by switching off their transponders or broadcasting false positions. It remains unclear who organised the oil’s transport on sanctioned vessels or whether HPCL-Mittal Energy Limited (HMEL), the refinery’s owner, was aware.

Emily Kilcrease, a director at the Centre for a New American Security and a former US trade and security official, said: “If I were advising the buyer, I would want to make sure that you had enough visibility in the full transport chain to make sure that you’re not one hop or two hops from a sanctioned activity.”

The shipments took place between July and September, originating from the Arctic port of Murmansk and travelling as far as the Gulf of Oman. Satellite images analysed by the FT show repeated ship-to-ship transfers between the Samadha and four US-sanctioned vessels: the Belgorod, Danshui, Dignity, and Primorye.

The Samadha repeatedly appeared to broadcast false positions, claiming to be en route to Oman while meeting the sanctioned ships offshore for crude transfers. Customs records obtained by the FT indicate that all four shipments, transported via the Samadha, were purchased from Varda LLC in St Petersburg and had a combined value of $277 million.

HMEL is a joint venture between Mittal Energy and Hindustan Petroleum Corporation Limited, an Indian state company, each holding a 49% stake, with the remaining 2% owned by financial institutions. Neither HMEL nor Mittal responded to requests for comment.

The revelations come as the US seeks to increase pressure on Indian firms not to purchase Russian oil. Last week, Washington imposed sanctions on Rosneft and Lukoil, Russia’s two largest oil producers, in a bid to compel President Vladimir Putin to negotiate with Ukraine.

India has emerged as one of the largest buyers of Russian crude since the invasion of Ukraine in February 2022, benefiting from discounted prices as Western buyers withdrew. This year, India has purchased 1.7 million barrels per day of Russia’s seaborne crude exports, second only to China.

Kilcrease noted: “The major consumers of this oil really want [it]. They’ve been willing to take a certain amount of risk of coming into the US Treasury’s sights.”

The Guru Gobind Singh Refinery, India’s tenth-largest, has a processing capacity of 11.3 million tonnes a year. Crude delivered to Mundra, Gujarat, is transported via a 1,000 km pipeline to the inland refinery.

The Samadha’s owner, Erika Freight Limited, remains largely unknown, and the vessel has since been sanctioned by the UK. Its registered address in the Seychelles is shared with 13 other vessels, complicating enforcement of international sanctions.

By Aghakazim Guliyev