in India they refuse oil transported by “Sovcomflot”

All Indian oil refineries refuse to accept Russian oil, which is transported by tankers of the Sovcomflot shipping company, due to US sanctions. This circumstance will further complicate trade between the two countries, which has gained significant momentum after the start of the full-scale Russian invasion of Ukraine, according to Bloomberg.

Citing sources familiar with the situation, the agency reports that both private and state-owned Indian refineries, including the largest Indian Oil Corporation, have stopped accepting cargo from Sovcomflot tankers. Refiners carefully check the ownership of each vessel to make sure they are not connected to companies subject to sanctions, sources told Bloomberg.

The agency notes that a number of Indian companies to which e-mail requests were sent, including Nayara Energy Ltd., where 49% of the shares belong to Rosneft, did not provide a prompt response. Sovcomflot declined to comment.

Last month, the US Treasury Department’s Foreign Assets Control Office imposed sanctions against Sovcomflot and 14 tankers in which the state-controlled company has a stake. This was in addition to broader measures that have been in effect since October against vessels not belonging to Sovcomflot and Russian-friendly companies for violating the price ceiling on Russian oil set by the G7 countries.

After the beginning of the Russian invasion of Ukraine in February 2022, India became the largest buyer of Russian oil, however, the tightening of American sanctions disrupted trade and led to the fact that oil refiners began to look for more expensive oil from other regions, including the United States.

According to Bloomberg’s interlocutors, Sovcomflot’s problems mean that Russia has fewer tankers to deliver oil, and this, in turn, leads to a reduction in discounts for buyers to compensate for higher freight costs.