How Will India Navigate Rising US Pressure, Shrinking Russian Oil Options, and the Urgent Need to Secure Stable Energy Supplies without Disrupting Its Geopolitical Balance?

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The most recent tranche of U.S. sanctions against Russia's two largest oil companies, Rosneft and Lukoil, is sending ripples through the global energy landscape, forcing countries like India to reconsider how they source their oil and how they approach diplomatic balancing. Announced by President Donald Trump, the sanctions mark a huge escalation in Washington's economic offensive against Moscow amid the protracted conflict between Russia and Ukraine.

A New Phase in the Sanctions War
 

After three years of war involving Ukraine, the U.S. is ramping up efforts to deny money to Russia by targeting the most lucrative sector of the country's economy: energy. Rosneft and Lukoil together account for more than 5% of the world's oil production, and together export approximately 2 million barrels per day by sea. Now that Rosneft and Lukoil are granted full restrictions, the U.S. Treasury announced that it will give global companies until November 21 to unwind any current contracts with them.

The goal is obvious: to prevent Moscow from earning oil revenue that accounts for nearly a quarter of its national budget and supports an ongoing war. The immediate implications for oil producers and consumers worldwide are telling, beginning with Asia, where Russian oil is a vital source of energy security.

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India is torn between strategic necessity and diplomatic pressure. India is the second-largest importer of Russian crude after China, sourcing approximately 35% of its total oil imports from Moscow. This discounted Russian crude has enabled India to control inflation and meet rising domestic energy demand.

However, with the new U.S. sanctions now in effect, New Delhi is under pressure to reduce its dependence. President Trump suggested that India has agreed to reduce imports of Russian crude to "almost nothing" by the end of the year. At the same time, Indian officials continue to emphasize balancing domestic energy needs with compliance with international obligations.

Private refiners such as Reliance Industries, which owns the world's largest refinery at Jamnagar, have now indicated that they intend to "curtail Russian imports" related to existing long-term contracts with Rosneft - an amount equal to about half a million barrels per day. Nayara Energy, a partially owned subsidiary, has not indicated a decision either way, while investors are interested to see how it calibrates sourcing. In the public sector, IOC, BPCL, and HPCL are reviewing contracts to ensure compliance; however, industry sources indicated that indirect flows through intermediaries will likely continue.

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Economic and Diplomatic Fallout
 

The new U.S. sanctions, effective on February 5, have put New Delhi under pressure to reduce its dependence. President Trump stated that "India essentially agreed to reduce imports of crude from Russia to virtually nothing by the end of the year," while Indian officials still point out that they need to balance their own energy needs with various obligations created by the world's countries.

Private refiners such as Reliance Industries, with the world’s largest refinery located at Jamnagar, just made it clear that it intends to "curtail Russian imports,” related explicitly to existing long-term contracts with Rosneft - almost half a million barrels per day. A partially owned subsidiary, Nayara Energy, which is thirsty for specific contract terms, was sitting on the sidelines, sorting out and analyzing how the company would calibrate sourcing. Also in the public sector, IOC, BPCL, and HPCL will all, in some form, review contracts to put them in compliance with market requirements, but industry sources indicated that indirect flows through intermediaries would be allowed.

Global Reaction 
 

Moscow has considered the sanctions ineffective, noting that its finances are derived more from taxes on domestic consumption than from export flows. Ukrainian President Volodymyr Zelenskyy applauded the move while calling on Western allies to impose even heavier restrictions. At the same time, the European Union is assessing ways to use frozen Russian assets to fund a €140 billion emergency loan for Ukraine's reconstruction. Both demonstrate some level of coordinated response by Western powers; however, each is tentatively treading with extreme caution.

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Strategic Choices for India
 

This presents a serious test of India's foreign policy doctrine of strategic autonomy. On one hand, energy diversification is now an exigent priority, which means that India may have to increasingly rely on suppliers from the Middle East, U.S., and Africa in order to avoid any shortfall. On the other hand, India must manage its longstanding defense and trade relationships with Russia while enhancing its cooperation with Washington, which has accelerated through forums such as the QUAD.

India could also assume some negotiated flexibility; for example, asking the U.S. for phase compliance or temporary waivers, to allow for a smooth transition. India could also quickly increase its strategic petroleum reserves and promote domestic exploration, both of which could enhance its energy resilience.

Final Thoughts
 

U.S. sanctions against Russian oil companies signal a paradigm shift in global energy diplomacy. For India, striking the right balance means supporting stability in the international order while safeguarding national energy security. How successfully New Delhi manages this delicate balance of sanctions, supply chains, and alliances will affect not only oil diplomacy but also India's role as a strategic actor in an evolving multipolar world.

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