Putin reaffirms India as key energy partner despite sanctions heat

New Delhi: Russian President Vladimir Putin used his December visit to New Delhi to reassure India that energy cooperation remains one of Moscow’s top priorities, a report has said.

Standing with Indian officials, he said Russia is committed to providing “uninterrupted shipments” of fuel to India and praised Indian partners as ‘very reliable,’ according to the India Narrative report.

His message came at a critical moment, just as India’s imports of Russian crude reached a five-month high, even after new US secondary sanctions took effect on November 21.

India’s dependence on Russian oil has grown sharply since 2022, and refiners appear unwilling to step back despite the increasing challenges. Nayara Energy is among the biggest buyers.

Between 2023 and 2025, the company sourced more than half of its total crude intake from Russia.

In some months of 2024, nearly 60 per cent of the crude processed at its Vadinar refinery came from Russian grades like Urals and ESPO.

However, keeping Russian crude flowing is becoming increasingly difficult. Many Western insurance providers have pulled back from covering vessels associated with the “dark fleet,” leading to a rise in shipping costs.

Freight rates for the Russia–India route have increased by nearly 20 per cent compared with mid-2025. Maritime brokers say almost 40 per cent of tankers previously used for this trade route are now considered high-risk or uninsurable, forcing refiners to rely on unfamiliar carriers and more complex shipping routes.

Payment systems are also shifting. With US regulations tightening, Indian buyers are turning to dirham- and yuan-based settlement channels. These systems work, but they also come with compliance and currency-stability risks.

Even so, analysts note that US sanctions do not ban Russian crude outright — they target specific entities. This means refiners are more likely to adjust their methods rather than cut ties.

Industry observers say ship-to-ship transfers, mixed cargoes, and re-documentation through hubs like Fujairah, Malaysia, and certain Turkish ports are increasingly being used to bring Russian oil to India without a direct link to sanctioned exporters.

Such practices mirror earlier global examples where sanctioned oil continued to reach buyers through opaque but reliable routes, as per the report.

Indian refiners still prefer Russian barrels for a simple reason: price. Russian crude continues to sell at a discount of $4–7 per barrel compared to similar Middle Eastern grades.

President Putin’s visit has reaffirmed that Moscow wants this energy partnership to continue, the report stated.

IANS