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Steel tycoon Lakshmi Mittal’s energy joint venture in India has said it has stopped buying Russian crude oil, shortly after the FT reported the company had bought almost $280mn of oil that was transported on sanctions-listed vessels.
HPCL-Mittal Energy said on Wednesday it “had already taken the decision to suspend further purchases of Russian crude” in response to “new restrictions on imports of crude oil from Russia by the US, EU and UK”.
The group, usually known as HMEL, is a joint venture between part of the Mittal group and Hindustan Petroleum Corporation Limited, an Indian state company.
The FT reported earlier on Wednesday that HMEL’s Guru Gobind Singh Refinery in Punjab, a major oil refinery, had received at least four shipments since July that had been transported most of the way from Murmansk on US-sanctioned vessels.
The new US sanctions, announced last week, targeted Rosneft and Lukoil, Moscow’s two leading oil producers, as part of an effort to apply pressure to Russian President Vladimir Putin over the war in Ukraine.
The move is set to hit Indian refiners in particular, since the country became the biggest buyer of seaborne Russian crude when other markets closed to the product following the full-scale invasion of Ukraine.
The White House has been increasingly keen to prevent India from buying Russian crude in an effort to heighten pressure on the Kremlin’s war machine.
Washington doubled tariffs on Indian imports to 50 per cent in August, citing the country’s record in “directly or indirectly importing Russian Federation oil”.
HMEL joins a growing list of India’s major refiners that have had to shift away from Russian oil.
Reliance Industries, owned by Asia’s richest man, Mukesh Ambani, has said it will “recalibrate” its imports, although it did not explicitly state that it will stop buying Russian oil.
Reliance, which runs the world’s largest refinery, said last week it was “fully committed” to applying sanctions and would adapt its “refinery operations to meet the compliance requirements”.
Indian Oil, a major state refiner, has subsequently specified that it would not “absolutely” stop buying Russian oil but would avoid purchases from sanctioned entities.
The FT reported this week that the sanctioned vessels took the four shipments of oil as far as the Gulf of Oman. To disguise their role in the process, the shipments were then passed to a vessel that had not been hit by US sanctions for the final leg of the journey to the Indian port of Mundra.
The vessel, the Samadha, made this short run four times.
To hide this process, the ships coming from Russia switched off their transponders, while the Samadha used its to broadcast a false position.
Customs filings show that the oil was purchased from Varda LLC, a St Petersburg oil supplier.
HMEL said that, since the cargo is supplied “on a delivered-at-port basis”, it was not aware of “details of other ships that crude may have been transported on, nor any attempts by those ships to conceal their position to pick up crude from sanctioned vessels”.
The company added that it complied with Indian law, with all shipments subject to “due diligence and compliance procedures” including “KYC [know your customer], sanctions screening, vessel history and prior port clearance”.
A former senior US sanctions official said they would expect Indian companies and officials would be worrying that “a story like this would create political will” in the US to take even harder action against New Delhi.
