India on the brink of a new oil shock
India is facing the very real threat of an oil shock as new US sanctions targeting Russian crude come into force. The measures, recently introduced, apply to Russian oil producers and vessels transporting crude, complicating access to affordable Russian oil for the world’s most populous country and potentially driving up inflation in Asia’s third-largest economy.
ndia’s reliance on imports for 88% of its oil needs, with nearly 40% of this sourced from Russia, underscores its vulnerability. While China also imports large volumes of discounted Russian oil, its diversified supply sources mean it is likely to be less affected.
The US Treasury has already blacklisted 183 vessels, predominantly oil tankers, involved in transporting Russian crude. Although these vessels are allowed to make deliveries until mid-March 2025, the restrictions are expected to significantly disrupt Indian imports in the long run.
Trade records show that 75 of these ships have previously transported Russian oil to India, making up around 30% of the crude moved by these tankers in 2024.
