State-owned banks, including the State Bank of India and Punjab National Bank, are more cautious, while private banks have taken a softer stance on the deadline for closing energy deals, in line with the interpretation of the sanctions by refiners, who rely on Russian supplies for a third of their oil imports.
Russia's Surgutneftegaz and Gazprom Neft, which have both been sanctioned, account for about 20% of Russia's oil exports to India, while Russia's shadow fleet, which was banned by authorities from entering Indian ports after March 12, carried 450,000 barrels a day, or a quarter of all shipments, to the country.
On Jan. 16, Reuters reported that Indian Oil Corp (IOC), the country's largest oil refiner, had announced a tender for high-sulfur oil on the spot market in anticipation of the sanctions on Russian supplies. Since then, Indian plants have already contracted supplies from Oman and the United Arab Emirates and are in talks with Saudi Arabia and looking for suppliers in West Africa.
Russia stands to lose up to 800,000 barrels per day of oil exports due to the tightening of U.S. sanctions. By the end of 2024, Russia exported 1.7 million barrels per day to India, nearly half of its total seaborne oil supplies.
On Jan. 10, the United States imposed sanctions on Russia's largest oil companies. The sanctions list includes more than 30 Russian oil service companies, as well as 184 "shadow fleet" tankers, logistics facilities, and third-party companies. The sanctions are expected to cause Moscow to lose billions of dollars in revenue each month.
"These are the most significant sanctions to date on Russia's energy sector, by far the largest source of revenue for [Russian dictator Vladimir] Putin's war," the Biden administration official said.
They were implemented to "strike at every stage of Russian oil production and distribution."