India has declared that it will only purchase Russian oil from compliant suppliers, in light of U.S. sanctions impacting global oil trade. The oil secretary, Pankaj Jain, underlined the need for suppliers to meet compliance standards during the India Energy Week conference. India’s significant ties to the U.S. financial system prompt caution in securing Russian oil, as the country navigates the complexities of international sanctions.

India, the second-largest importer of Russian crude oil, has announced that it will only purchase oil from suppliers and vessels that are not sanctioned by the United States. Pankaj Jain, the Oil Secretary, emphasized this requirement during the India Energy Week conference, marking the most definitive statement on India’s stance regarding Russian oil transactions amidst heightened sanctions from Western nations.

The imposition of broad sanctions on Moscow has disrupted global oil markets, compelling entities that acquire discounted Russian crude to navigate complex compliance issues. India, which follows United Nations sanctions, is particularly cautious due to potential secondary sanctions from the United States, as many Indian banks and governments are significantly tied to the U.S. financial landscape.

After sanctions were enacted against Russia in response to the invasion of Ukraine in 2022, India emerged as the leading buyer of discounted Russian oil. Jain pointed out that suppliers bear the responsibility to ensure compliance with necessary guidelines, stating, “It is the responsibility of the supplier to deliver to me something that meets my requirements of compliance.”

Indian refining representatives have communicated specific compliance expectations to Russian oil traders, asserting, “We are not going to touch any cargo that involves sanctioned entities or ships in the supply chain.” This caution stems from heightened freight costs and operational challenges following recent U.S. sanctions targeting Russia’s oil supply chain.

Furthermore, Jain indicated that Russian firms like Novatek and Sber Bank expressed interest in collaboration with Indian energy ventures, suggesting ongoing engagement despite the sanctions. Indian officials insist that they cannot risk dealing with any cargo that could potentially connect to a sanctioned entity and emphasized that sellers must arrange clean logistics for oil deliveries.

In summary, India has established strict conditions for purchasing Russian oil, emphasizing compliance with U.S. sanctions. The country is navigating the intricate landscape of international sanctions while seeking to maintain its energy supply. Key officials have mandated that suppliers ensure that oil transactions adhere to compliance requirements, thereby ensuring that Indian entities mitigate potential risks associated with sanctions. As India continues to engage with Russian oil suppliers, adherence to compliance measures will significantly shape the future of its oil import strategies.

Original Source: www.usnews.com

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