New EU sanctions threaten Indian refiners' $14 billion export market: ICRA

Time of India

30-07-2025

Exports by Indian oil refiners are likely to face major disruption following the implementation of the EU's 18th sanctions package against Russia, according to a report by ICRA.
The report highlights the potential impact on Indian refiners, who collectively exported approximately $14.3 billion worth of petroleum products to the EU in fiscal year 2024-2025.
The new EU sanctions, enacted on July 18, include a crucial import ban on all refined products made from Russian crude oil originating from third countries.
Notable exceptions to this ban are Canada, Norway, the US, the UK, and Switzerland. This measure directly targets nations like India, Turkey, and the UAE, which have become major processors of discounted Russian crude and significant suppliers of refined products to Europe in recent years, ICRA further said.
Price caps introduced
India has emerged as a key refiner of Russian crude, capitalising on previously steep discounts that ranged from $10-16 per barrel. While these discounts have recently narrowed to $2.5-4 per barrel, ICRA suggests that the newly introduced price cap and other measures could potentially widen them once more.
Over the past three years, India's exports of petroleum products to the EU have surged, reaching an annual average of $14-15 billion. This increase was largely driven by reduced Russian supplies to European markets, creating a substantial opportunity for Indian refiners.
Beyond the import ban, the EU has also lowered the crude oil price cap from $60 per barrel to $47.6 per barrel, aligning it with current global oil prices.
A dynamic mechanism for future price cap reviews has also been introduced. These price caps are designed to prevent EU operators from providing transport or insurance services for Russian oil traded above the stipulated limit.
Furthermore, the sanctions have expanded the list of sanctioned vessels by 105, bringing the total to 444. These vessels are now subject to port access and maritime transport service bans.Indian refiners have already taken steps to cease business dealings with sanctioned entities and traders.
Despite these significant measures, crude oil prices have remained largely stable, indicating that the market anticipates minimal disruption to global supplies, even though Russian oil exports account for roughly 7 per cent of global liquid consumption, the report stated.