Indian Banks Halt Payments for Russian Oil as US Sanctions Take Effect

Indian banks have begun halting payments for Russian oil due to tightened US sanctions, posing obstacles for Russia’s energy sector, Energy Intelligence reported on January 20.

According to the outlet, “Financial institutions, notably the State-owned State Bank of India and Punjab National Bank are limiting transactions,” while private banks have taken a more flexible approach.

The sanctions imposed on January 10 by the Biden administration unveiled its most extensive sanctions package to date. They targeted Russia’s oil and liquefied natural gas sectors. Additionally, they targeted more than 180 vessels in Russia’s shadow fleet  and major energy companies, including Gazprom Neft and Surgutneftegas.

Russian tankers sanctioned after January 10, but booked prior to the sanctions taking effect, will be permitted to unload at Indian ports until March 12, the end of a US “grace period,” an official told Bloomberg.

Indian refineries have already signed agreements to purchase crude oil from Oman and the UAE.

Meanwhile, dozens of Russian tankers worldwide have anchored and halted operations over the past week.

India, one of the world’s largest importers of oil, has indicated it may increase purchases of American oil and gas following a recent announcement by US President Donald Trump on January 20 to ramp up energy production.