Trump sanctions Rosneft and Lukoil - Reliance rethinks Russian oil sourcing

Global oil markets surged after the U.S. imposed fresh sanctions on Russia’s largest oil producers, Rosneft and Lukoil, in a move aimed at curbing Moscow’s revenues. Following the announcement, Brent crude prices jumped by over 5%, reflecting investor concerns over potential supply disruptions.

The sanctions freeze the U.S. assets of these companies and ban American entities from conducting any business with them. Secondary sanctions target foreign banks and institutions that continue trading with the Russian firms, signaling a broader effort to tighten pressure on Moscow.

The measures are already prompting shifts in the global oil trade. Indian refiners, in particular, are recalibrating their Russian crude imports. Reliance Industries, India’s largest importer of Russian oil, is expected to halt direct purchases under its long-term deal with Rosneft, which involved nearly 500,000 barrels per day. State-run refiners, such as Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum, are likely to continue sourcing Russian crude via intermediary traders not currently targeted by sanctions. This allows them to maintain supply while avoiding direct exposure to the sanctioned firms.

Experts note that while the sanctions have triggered immediate market reactions, the actual disruption to Russian oil exports may be limited in the short term. Traders and refiners are exploring alternative channels, which could mitigate the impact on global supply. Nonetheless, the move underscores the interconnectedness of geopolitics and energy markets, with price fluctuations felt across Asia, Europe, and the Americas.

For India, the development is particularly significant. Reliance may face higher costs and logistical adjustments as it shifts away from direct imports, while PSUs continue purchases through intermediaries to ensure uninterrupted operations. Globally, the sanctions signal heightened scrutiny of Russian oil flows, with implications for both market stability and energy security.