Reliance Industries and state-run refineries in India are planning to suspend imports of Russian crude oil following new US sanctions on major Russian oil companies, Rosneft and Lukoil. These sanctions, announced by US President Donald Trump, prohibit any commercial dealings with these firms, which are significant suppliers of oil to India. Reliance, the largest Indian consumer of Russian oil, currently imports around 500,000 barrels per day under a long-term contract with Rosneft. This crude constitutes about half of the feedstock for its Jamnagar refinery, the world's largest refining complex.

A spokesperson for Reliance stated, "Recalibration of Russian oil imports is ongoing, and Reliance will be fully aligned with Government of India (GOI) guidelines." The company is reassessing its strategy in light of the sanctions, which require all transactions with the sanctioned companies to cease by November 21. Analysts suggest that while Reliance may face challenges in sourcing alternative supplies, it could potentially turn to West Asia, Africa, or the US for crude oil.

The sanctions come amid ongoing tensions related to the Ukraine conflict, and they could significantly impact India's oil import bill, which relies heavily on Russian crude. Currently, Russian oil accounts for about 36% of India's total crude imports, with Rosneft and Lukoil supplying nearly 60% of that volume. The loss of discounted Russian oil could cost India an estimated $4-5 billion annually in savings.

State-run refiners may continue to source Russian oil through intermediary traders for the time being. However, the overall market dynamics are expected to change, with increased competition for alternative supplies likely driving up prices. The benchmark Brent crude price rose by 5% following the announcement of the sanctions, reflecting market concerns over supply disruptions.

Industry experts believe that the recalibration of oil imports could also facilitate smoother trade negotiations between India and the US, as India's energy dealings with Russia have been a point of contention in these discussions. As Reliance and other refiners navigate these changes, the focus will be on compliance with US regulations while maintaining supply stability.