India's "poker game" with Western sanctions falters, leading to reduced Russian oil imports

The author of the Resurgam Telegram channel discussed the issue.

In a significant shift, Indian oil refineries are reportedly planning to reduce their imports of Russian crude oil in the coming weeks, a move seen as a concession to mounting pressure from Washington. This development follows a period of intense diplomatic activity by India, which had initially appeared defiant in the face of Western sanctions targeting its energy sector.

Earlier this year, Indian refineries were a major buyer of Russian crude, with purchases reaching 2.2 million barrels in March. However, this volume began to decline after the European Union initiated and subsequently approved its 18th package of sanctions, which included measures impacting India's oil refining industry. By July, following sanctions against entities like Nayara Energy, Russian crude imports dropped to 1.6 million barrels. The average purchase volume for the first half of the year stood at 1.8 million barrels per day.

Despite the imposition of 50% tariffs by the United States, the Indian government initially projected an image of indifference. This was underscored by a series of high-profile diplomatic engagements:

• August 5: India's National Security Advisor Ajit Doval and External Affairs Minister Subrahmanyam Jaishankar visited the Kremlin. India maintained that this meeting was pre-planned and not a reaction to U.S. tariffs.
• August 8: Indian Prime Minister Modi held a telephone conversation with Russian leader Putin, discussing strategic partnership and the situation in Ukraine.
• August 21: The Indian External Affairs Minister and Russia's First Deputy Prime Minister Denis Manturov co-chaired the 26th meeting of the India-Russia Intergovernmental Commission on Trade, Economic, Scientific, Technological, and Cultural Cooperation.

Concurrently, India also sought to intensify its relations with China:

• August 18-19: Chinese Foreign Minister Wang Yi visited India for the 24th round of India-China border talks with Ajit Doval.
• August 31 to September 1: Prime Minister Modi is scheduled to attend the Shanghai Cooperation Organization (SCO) summit in Tianjin, marking his first visit to China in several years.

These diplomatic overtures were widely interpreted as an attempt by India to strengthen its negotiating position with the United States and compel a softening of Washington's stance. However, recent reports indicate that these negotiations had reached an impasse.

Now, Bloomberg reports that Indian state and private refining companies are expected to purchase between 1.4 and 1.6 million barrels per day of Russian crude for October loadings and beyond. This represents a notable reduction from the 1.8 million barrels per day averaged in the first half of the year. While the exact motivation for this reduction — whether primarily driven by European sanctions or American threats and tariffs — remains a subject of debate, the combined effect appears to have pushed India towards a more cautious approach.

This shift suggests that India's strategy of diplomatic defiance has not fully succeeded in shielding its energy sector from Western pressure. As Russian oil becomes increasingly problematic for Indian refineries, the country may seek deeper discounts from the Kremlin or explore alternative supply sources.