Of ships and tankers: India, refiners not breaking international sanctions

A US official involved in compliance said 'General Licence 93' allowed India to receive vessels owned by a sanctioned entity, Russian state behemoth Sovcomflot, which ships the bulk of India's oil

Tankers owned by sanctioned entities continue to transport Russian crude oil to India this year. In some cases, specific tankers sanctioned by the United Kingdom continue to supply India with Russian oil.

But, contrary to reports, no sanction laws have been broken, according to an investigation by Business Standard using ship tracking data, government documents and industry sources.

Indian imports of Russian oil on sanctioned vessels have been highlighted by western think tanks and media. Contrary to all these reports and tanker deliveries, both New Delhi and Indian refiners are not breaking any international sanction laws, a United States government official, Indian refining executives, and government officials told Business Standard.

The US official, involved in compliance, said “General Licence 93’’ allowed India to receive vessels owned by a sanctioned entity, Russian state behemoth Sovcomflot, which ships a bulk of India’s oil. GL 93 authorises Sovcomflot vessels to continue delivering crude oil. 

There are less than 20 Sovcomflot vessels barred from operating, which Indian refiners stopped using in early 2024. China continued to receive, ship tracking data shows. The shipping company operates 125 tankers, according to its website. 

No transaction under scrutiny

No Indian crude oil transaction was ever under scrutiny, says Oil Secretary Pankaj Jain. Around 40 per cent of India's imports ranging from 1.6 million to 2 million barrels per day come from Russia, at a discounted rate. Indian purchases of Russian oil, which account for 2 percent of global oil demand, have placed a lid on the price of crude oil, according to Oil Minister Hardeep Singh Puri, by increasing the supplies in the market.

US diplomats visiting India earlier this year told reporters in New Delhi that India could continue importing Russian crude oil. They declined to comment when asked if all vessels owned by sanctioned Russian entities were barred from transporting Russian oil. That had left some confusion on what tankers were allowed.

China’s shipments of sanctioned crude from Iran and shipments from Russia by US-sanctioned tankers account for around 40 per cent of total Indian crude imports, at over 2 million b/d, according to calculations by Business Standard based on ship tracking data and market intelligence.

More than 130 tankers carrying Russian, Iranian, and Venezuelan oil were sanctioned in 2024 by jurisdictions including the US, UK and the European Union, according to a document from market intelligence agency Vortexa. This compares with less than 20 in each of the last two years. The UK has been most aggressive, sanctioning 70 per cent of the tankers carrying Russian oil, while the US OFAC agency sanctioned less than 20 per cent.

UK sanctions

The UK blacklisted 18 oil tankers and four LNG tankers belonging to Russia’s so-called "shadow fleet" this month after the new Labour government increased scrutiny on vessels carrying Russian oil.

Six vessels — NS Bora, Moskovsky Prospect, NS Arctic, SCF Baikal, SCF Samotlor, and Suvorovsky Prospect — belong to Russia’s state-backed shipping firm, Sovcomflot. Bora, Baikal, Moskovsky, and Suvorovsky have supplied India in the past few months after their owner Sovcomflot was sanctioned by Washington in February.

In September, Liberty, owned by Russia's Sovcomflot, delivered a cargo of Russian Urals crude to Jamnagar on India’s west coast, shows data from market intelligence agency Kpler. Vortexa analyst Armen Azizian confirms that Liberty  was the first vessel to load from Russia after being sanctioned. Reliance does not comment on individual trades.

NS Lotus, which changed its name to Legacy a day after it was sanctioned by the UK, delivered three cargoes to India this year in May, July, and October, Kpler data shows. Both Liberty, previously called NS Laguna, and Legacy were earlier part of Sun Ship Management, which was placed under US sanctions in December 2023, prompting the name change, according to shipping database Equasis and industry officials.

But sanctions by the UK do not apply to India, according to a top government official and a senior official from a state refiner. India pays no attention to sanctions by the EU and UK mainly because their regulations do not target buyers, two Indian top refining sources say. They apply primary sanctions, which are aimed at the trader supplying oil and the tanker, but there is no sanction on the buyer lifting the crude. Secondly, Indian banks and refiners have little exposure to British pounds or euros.

This is a key reason why sanctions by the UK and EU affected a measly 50,000 barrels a day of Russian oil trade while US OFAC sanctioned tankers lost 300,000 bpd in supplies, the Vortexa document showed.

US sanctions

US sanctions have the strongest impact on the Russian market, says Armen Azizian, senior oil risk analyst at Vortexa. Because US imposed primary and secondary sanctions, with secondary sanctions targeting buyers.

But its impact on Iranian supplies is muted as 70 per cent of the sanctioned tankers continue to ply because Chinese independent refiners pay little heed to Washington’s diktats, industry officials say.

But the impact of OFAC sanctioned tankers on India has been limited, with nearly 20 vessels owned by Sovcomflot having visited India this year, including Pavel Chernysh, Adygeya, Jaguar, Vladimir Tikhonov, SCF Vankor, NS Laguna, NS Lotus, SCF Surgut, Zaliv Amerika, SCF Baikal, Moskovsky Prospect and Primorsky Prospect among others.

Some changed their names, according to data from market intelligence agencies Kpler and Vortexa, and shipping database Equasis. Primorsky Prospect became Rigel in August and changed ownership and manager to Dubai-based Yugo Shipping and Avebury Ship Management respectively, Equasis data shows. In August, NS Commander, a Sovcomflot vessel, changed its name to Constellation, after delivering a cargo to Paradip. This was the third such delivery from the Commander to an Indian port this year.

While western agencies have pointed to these voyages as India receiving sanctioned vessels, a US OFAC official, who declined to be named, told Business Standard that while these vessels were operated by a sanctioned entity Sovcomflot, the sanctions did not apply to them. So, India broke no laws.

“OFAC designated Sovcomflot, Russia's largest maritime and freight company, pursuant to EO 14024, and identified 14 crude oil tankers as blocked property in which Sovcomflot has an interest,’’ the official said in an email. 

But OFAC has also issued General License 93, authorising transactions involving certain Sovcomflot vessels. Pursuant to GL 93, other vessels in which Sovcomflot, or any entity in which Sovcomflot, owns, directly or indirectly, an interest of 50 per cent or more, but which are not identified on the SDN (specially designated nationals) sanction list are not blocked, the official added. 

India cannot use a vessel named in the SDN list. Kapok, which is on that list, delivered 1 million barrels of Russian Urals to Jamnagar in early October, Kpler data shows. But Indian refiners are barred by New Delhi from using this vessel now.