India, Russian oil, and the looming secondary sanctions threat, Pg17.

Key Highlights:

• Indian Oil Corporation (IOC) will comply with international sanctions, impacting its Russian crude imports, which constituted 21% of its import basket between April and September 2025.
• Reliance Industries Limited (RIL) is assessing the implications of US sanctions on Russian oil giants and will comply with Indian government guidance, likely reducing Russian imports.
• HPCL-Mittal Energy (HMEL) has already suspended further purchases of Russian oil following Western sanctions.
• US sanctions on Rosneft and Lukoil raise the threat of secondary sanctions, potentially affecting countries like India that engage with these entities.
• Russian oil has accounted for over 35% of India's overall oil imports in 2025.

Detailed Insights:

• Secondary sanctions target third-party countries/entities, limiting their engagement with sanctioned nations, and have an extraterritorial aspect that is potentially suspect under international law.
• The US dollar's status as the primary reserve currency and the centrality of the American financial system make US secondary sanctions a potent threat.
• Indian refiners depend on the US banking system for dollar-denominated transactions, making them vulnerable to secondary sanctions.
• Most Indian refiners have investments or arms operating in the US, and have long-standing business and trade relationships with American companies that they might have to sacrifice.
• Refiners might explore buying Russian-origin crude from third-party traders not yet sanctioned, but these trades are also expected to be affected.
• The Indian government maintains it will buy oil from the best available source, provided it is not under sanctions, but the threat of secondary sanctions could still impact supplies.

Key Concepts Involved:

• Primary Sanctions: Restrictions that curtail or prohibit engagement with American citizens/entities.
• Secondary Sanctions: Measures that limit the engagement of other countries/entities with the target country.
• Reserve Currency: A currency held in large quantities by governments and institutions as part of their foreign exchange reserves.