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India is investing in a domestically built crude-carrying fleet as Western sanctions target energy trade
New Delhi is eyeing domestic manufacture of oil tankers in an effort to reduce the risk of running foul of Western sanctions against Russia’s energy sector, BusinessLine reported on Tuesday.
The outlet cited an official from India’s Ministry of Ports, Shipping and Waterways who stated that the government will back manufacturers through SPVs (special purpose vehicles), that will be formed by the state-owned Shipping Corporation of India (SCI), oil marketing companies, dockyards, and financial institutions.
An Indian oil ministry survey from one year ago identified the need for an extra 100 tankers varying from a few thousand metric tonnes of deadweight to ultra-large crude carriers, according to industry watchers. Domestic manufacturing will also help India reduce its oil import bill, which currently stands at $100 billion.
India has emerged as Russia’s second-largest oil buyer in the past two years. In 2024, India imported crude oil worth 49 billion euros from Russia, according to a recent report by the Energy and Clean Air Research Center. China has imported Russian oil worth 78 billion euros, and Turkey – 34 billion euros, the report stated.
Western governments announced large-scale sanctions in January targeting Russian oil and gas exporters and a so-called “shadow fleet” of oil tankers transporting crude – a move that affected India, which depends on sea transport for energy imports.
New Delhi officials have stated that no disruption to Russian oil imports is expected at least until March, when the new restrictions will take effect.
Head of the state-owned Indian Oil Corporation (IOC) Arvindar Singh Sahney told PTI agency earlier this month that the company is buying “clean Russian crude oil” that does not risk running afoul of US sanctions.
Moscow, meanwhile, vowed to continue supplying oil to global markets despite sanctions pressure. Speaking at India Energy Week in New Delhi earlier this month, First Deputy Energy Minister Pavel Sorokin insisted that while the impact of “illegal” sanctions imposed by the outgoing Joe Biden administration remains to be assessed, Moscow will continue strengthening its energy ties with its major energy partners.
READ MORE:
Where there’s oil there’s a way: Can US sanctions halt Russian crude exports to India?
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