- The United States has imposed sanctions on Russia’s two largest oil firms, Rosneft and Lukoil, in an attempt to cripple funding for Moscow’s war in Ukraine.
- Major buyers in India and China, who together import millions of barrels of Russian oil daily, have begun canceling orders ahead of the November 21 deadline.
- Analysts predict that Russia will increasingly rely on a “shadow fleet” of tankers and complex intermediary networks to bypass the sanctions.
- The ultimate success of the sanctions hinges on how strictly the US enforces them and the strategic decisions made by New Delhi and Beijing.
US Sanctions Send Shockwaves Through Asian Energy Markets
President Donald Trump’s administration has unleashed what he termed “tremendous” sanctions against Russia’s oil giants, Rosneft and Lukoil, aiming to choke the financial pipeline fueling Moscow’s war machine. The impact was felt almost immediately, not on the battlefield, but in the trading offices of India and China, Russia’s most crucial economic lifelines.
According to industry insiders, oil companies in the world’s two most populous nations have started canceling crude oil orders to comply with a looming November 21 deadline. Until now, both countries have largely resisted Western pressure to stop buying discounted Russian oil, citing their national energy needs. Between them, China and India import a staggering 3.5 to 4.5 million barrels of Russian oil per day, a significant portion of which comes from the newly sanctioned firms.
India and China’s Calculated Pause
While the initial reaction suggests compliance, analysts believe this may be a temporary holding pattern. Richard Jones, a crude oil analyst at Energy Aspects, noted that most Indian and state-owned Chinese buyers will likely “self-sanction for a cycle or two” until they can gauge Washington’s enforcement intentions and establish new workarounds.
New Delhi’s Delicate Balancing Act
For India, the sanctions present a significant dilemma. The nation has become heavily reliant on cheap Russian crude to power its economic growth and shares a historical friendship with Moscow. However, it is also deepening its strategic ties with Washington, partly to counter China’s regional influence. With a major trade deal with the US under negotiation, demonstrating even a gradual reduction in Russian oil imports could be a key gesture of goodwill.
Beijing’s Strategic Allegiance
China, Russia’s most steadfast partner, faces a different calculation. While its major state-owned firms want to avoid secondary US sanctions, Beijing is unlikely to abandon its “no limits” partnership with Moscow. Yun Sun, director of the China program at the Stimson Center, stated, “The bottom line is China will not abandon Russia.” Smaller independent refineries, known as “teapots,” may continue purchasing Russian oil through third parties, ensuring a continued flow, albeit a more complicated one.
The Shadow Fleet and Sanction Evasion
Lurking beneath the surface of this geopolitical chess match is Russia’s “shadow fleet”—a vast network of tankers with opaque ownership designed to transport crude outside of Western oversight. This fleet has expanded by 45% in the last year alone, numbering nearly 1,000 ships. Analysts expect Russia to lean heavily on this network, alongside a complex web of intermediaries and layered transactions, to obscure the origin of its oil and continue selling it on global markets. These workarounds increase costs for Moscow, hitting its revenues, but they underscore the immense challenge of completely cutting off Russia’s oil income. Ultimately, the effectiveness of these sanctions will depend not just on the traders, but on Washington’s willingness to enforce them.