India confirms deadline for Russian oil tankers amid US sanctions

India has confirmed that tankers carrying Russian oil will have until February 27 to discharge their cargo, as clarified by the United States amid the latest sanctions targeting Moscow’s oil revenue.

Pankaj Jain, India’s oil secretary, made the statement during a recent event, saying that the US Office of Foreign Assets Control (OFAC) had formally communicated the deadline, Caliber.Az reports via foreign media.

“The deadline for discharging the oil is February 27,” Jain said, in response to a question regarding the last date for sanctioned Russian vessels to offload their cargo. He also added that the deadline for completing financial transactions related to these shipments is set for March 12.

The US sanctions, imposed earlier this month, are part of broader measures aimed at curbing Russia's oil exports, which have been a significant source of revenue amid the ongoing war in Ukraine. These sanctions have created disruptions in global oil supply, particularly affecting tankers and shipping availability, as the world’s second-largest oil producer faces mounting restrictions.

India, which adheres to United Nations sanctions rather than those imposed by individual countries, has been facing challenges in securing Russian oil due to the risk of secondary sanctions from the US. This is especially critical as many Indian banks and businesses have extensive exposure to the US financial system.

Despite these challenges, India has emerged as the largest buyer of Russian oil, purchasing it at discounted rates after Western nations reduced their energy imports from Moscow. Jain emphasized that India will continue to purchase Russian oil as long as it is priced below the $60 per barrel cap set by Western countries and is sold without the involvement of sanctioned Russian entities or vessels.

Prior to the war in Ukraine, Russian oil accounted for just 0.2 per cent of India's total crude imports, but this figure has surged to more than a third of India’s crude oil imports. However, Indian refiners are facing difficulties securing Russian oil for March delivery, as traders have halted offering cargoes following sanctions imposed on January 10 by the US.

Oil Minister Hardeep Singh Puri reassured that there is no shortage of oil in the market. He noted that countries like Guyana, Brazil, Canada, and Suriname are ramping up their oil output, helping to fill the gap left by reduced production from major producers.

“If Russian oil is available at good discounts, we will buy it; if it is available elsewhere, we will buy from them,” Puri stated, reiterating India's strategy of securing affordable oil supplies.

Separately, Puri revealed that Indian oil refiners are exploring plans to build three refineries, each with a capacity of 400,000 barrels per day (bpd), instead of a single 1.2 million bpd refinery originally planned for Maharashtra. The shift in plans comes due to challenges in procuring land for the large-scale refinery project.

By Vafa Guliyeva