India on the verge of an oil shock: the consequences of new US sanctions against Russia

India may face an «oil shock» due to the impending US sanctions against Russian oil. The era of cheap Russian oil for India is likely to end, as new sanctions will make imports more difficult and could trigger inflation in Asia's third-largest economy.

Bob McNally, president of Rapidan Energy Group, noted that the sanctions will affect India more than China, as most of India's oil imports come from Russia. On January 10, the U.S. Treasury Department imposed sanctions on two Russian oil companies and 183 vessels, mostly oil tankers. These tankers will be able to continue unloading oil until March 12.

From April to November 2024, India imported 88% of its oil, with about 40% of this volume coming from Russia. Of the 183 authorized tankers, 75 previously transported Russian oil to India, which accounted for about 30% of the 687 million barrels transported last year.

Analysts note that the consequences will be most noticeable for Indian refineries. The Indian Ministry of Oil and Natural Gas has not commented on the situation.