US Sanctions Disrupt Russian Oil Deliveries to India as Vessels Divert Course

At least two oil tankers transporting Russian crude to India have diverted to alternate destinations following the imposition of new United States sanctions, according to trade sources and shipping data analysed by LSEG.

The vessels, originally en route to Indian ports, were redirected amid mounting pressure from Washington on global buyers to reduce their energy ties with Moscow.

The U.S. Treasury Department this week expanded its sanctions list to include more than 115 individuals, entities and ships linked to Iran, with several of those vessels involved in the transport of Russian oil. The move comes as part of Washington’s broader strategy to curtail Russia’s oil revenues, which it argues are being used to finance the war in Ukraine.

President Donald Trump has publicly called on countries to halt purchases of Russian oil altogether. He has also threatened a 100% tariff on imports from Russia unless Moscow agrees to a substantial peace agreement in Ukraine.

Among the impacted shipments, the Aframax-class tankers Tagor and Guanyin, as well as the Suezmax-class Tassos, were scheduled to arrive at Indian ports in August. All three vessels have been listed under U.S. sanctions.

Tagor was bound for Chennai on India’s eastern coast and had been designated for Indian Oil Corporation (IOC). The vessel is now altering course towards Dalian, China, according to tracking data. Tassos, which was expected at a western Indian port, is currently en route to Port Said, Egypt. Only Guanyin appears to remain on course, heading for the port of Sikka in Gujarat, a site used by both Bharat Petroleum Corporation Limited (BPCL) and Reliance Industries.

Indian authorities and oil companies have yet to respond publicly in detail. Indian Oil Corporation and BPCL did not reply to Reuters’ queries on the diverted shipments. A spokesperson for Reliance Industries stated that “neither of these two vessels, Guanyin and Tassos, is coming to us,” although shipping records indicate that Reliance has previously received deliveries via the Guanyin.

Further complicating the situation, two other vessels — the Achilles and the Elyte — are currently preparing to offload cargoes of Russian Urals crude for Reliance Industries. Both ships are subject to sanctions by the United Kingdom and the European Union. India has consistently rejected the legitimacy of EU sanctions when applied to non-European countries, maintaining that its energy purchases are governed by national interest and not external political considerations.

The ownership of the sanctioned vessels has also come under scrutiny. The Tagor and Tassos are linked to Zulu Shipping, while Guanyin is owned by Silver Tetra Marine. Both firms are now subject to U.S. Treasury Department measures. Attempts to contact the companies for comment were unsuccessful.

India remains one of the largest purchasers of Russian oil, accounting for more than one-third of its import requirements. The volume of trade has grown significantly since the onset of Russia’s full-scale invasion of Ukraine in February 2022, with Indian refiners benefiting from discounted Russian crude as many Western buyers exited the market.

However, recent months have seen a tightening of enforcement measures. The United States has increasingly sought to target shipping and insurance networks facilitating Russian oil exports. These steps include sanctioning intermediary firms and vessels that enable the transport of oil sold above the G7 price cap of $60 per barrel for Russian crude.

The sanctions have introduced fresh complications for Indian refiners, who rely on a combination of spot purchases and term contracts to meet domestic fuel demand. Analysts say that while India may seek to maintain its supply diversification strategy, continued U.S. pressure could limit its access to discounted Russian oil over the medium term.

For Moscow, the latest redirections highlight growing operational risks in sustaining maritime oil exports, particularly to countries that are not aligned with Western sanctions regimes. China, already the largest buyer of Russian energy, is likely to absorb some of the diverted volumes, but the costs of longer shipping routes and the narrower pool of available tankers may impact Russia’s export revenues.

Indian Refiner Tightens Trade Conditions After Latest EU Sanctions on Russia