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The European Union's latest sanctions will adversely affect countries including India, Turkey, and the UAE. (AI image)
Russian oil sanctions by the European Union could dent India’s $15 billion fuel exports, the Global Trade Research Initiative (GTRI) has warned. The EU's 27 member states have introduced their 18th sanctions package against Russia, primarily targeting the oil and energy sector revenues.
From an Indian standpoint, the biggest takeaway is that these new sanctions also apply to imports of petroleum products refined from Russian crude oil in any third nation.India imports crude oil from Russia in a big way and then exports it globally.
How India’s $15 billion Oil Exports Will Be Hit
- The European Union's latest sanctions will adversely affect countries including India, Turkey, and the UAE, which process Russian crude oil to produce and export diesel, petrol, and jet fuel to European markets.
- "India's $5 billion exports of petroleum products to the EU are at risk. The EU's new sanctions ban imports of refined petroleum made from Russian crude via third countries like India," GTRI Founder Ajay Srivastava said according to a PTI report.
- GTRI's assessment indicates that the new restrictions affect refined petroleum products from third countries using Russian crude, with exemptions granted to only a handful of nations including the US, UK, Canada, and Switzerland.
- The think tank reports that whilst India's petroleum product exports to the EU stood at $19.2 billion in FY24, then declined significantly by 27.1% to $15 billion in 2024-25.
- India's crude oil imports from Russia were around $50.3 billion in FY2025. This is more than one-third of India’s total crude expenditure of $143.1 billion.
"Although India continues to engage in legitimate trade with Russia, the political optics of such transactions are shifting in Western capitals. As energy ties deepen, India will have to walk a fine line between economic pragmatism and geopolitical pressure," Srivastava said.Nayara Energy and Reliance Industries Limited (RIL) are expected to encounter challenges due to the European Union's latest sanctions against Russian oil.The EU has lowered the Russian oil price cap from $60 to $47.6 per barrel and introduced restrictions on vessels transporting Russian oil. These measures will become effective September 3.
According to an ET report, whilst Nayara Energy faces direct operational constraints from EU's targeted sanctions, RIL must navigate complications arising from restrictions on fuel products derived from Russian oil.
Industry specialists and analysts suggest that both companies risk being shut out of European markets. These sanctions also complicate Rosneft's reported plans to divest its 49% stake in Nayara. As India's principal fuel exporters, both RIL and Nayara stand significantly affected by these developments.Also Read | Russia oil squeeze: Trump’s 100% tariff threat - should India panic?
Advantage India & Less Cause For Worry
The new oil price limit will force Russia to sell its crude at reduced rates to countries including India.
As Russia's second-biggest oil customer, India stands to benefit from this situation. Russian oil currently makes up about 40% of India's total oil imports.Whilst India could see advantages from lower prices, there are concerns about future imports due to potential American sanctions. US President Donald Trump has warned that nations buying Russian exports could face penalties or heavy tariffs if Russia does not achieve peace with Ukraine within 50 days.Oil Minister Hardeep Singh Puri has rejected concerns about possible consequences for India if Russian oil access becomes restricted through additional tariffs. "I'm not worried at all. If something happens, we'll deal with it," Puri has said."India has diversified the sources of supply and we have gone, I think, from about 27 countries that we used to buy from to about 40 countries now," he said.Also Read | Russia oil sanctions: EU moves on crude, oil price cap may hit Reliance, Nayara; enforcing may be difficult, India may still benefit
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