India and the US: India must negotiate a favourable FTA for giving up Russian oil

The American decision on October 22 to blacklist Russia’s energy giants Rosneft and Lukoil marks a significant escalation in economic sanctions targeted at Russia, as these two companies together account for 57% of Russia’s crude oil output and export revenue. While smaller Russian firms, responsible for the remaining 43%, remain unsanctioned by the US for now, the impact of this move is profound for major oil purchasing countries such as India. Indian oil companies have already announced that they will cease purchasing Russian oil to avoid potential sanctions. This shift is especially notable given that Russia’s share in India’s crude imports surged from a mere 1% to an all-time high of 38% following the Ukraine war. While the Donald Trump administration claimed that India was indirectly supporting Putin’s war efforts by buying Russian oil, New Delhi’s stance was simply driven by the pursuit of affordable energy sources available at the time.