- Sanctions and EU price-cap rules add logistical inefficiencies.
- Shortage of non-sanctioned tonnage is the key bottleneck.
- 17 additional vessels are needed to restore full volumes.
India’s crude oil imports from Russia took a hit in July, dropping 20% month-on-month to 1.4 million barrels per day. This decline is largely due to stricter enforcement of sanctions, increased scrutiny from the US, EU, sanctions affecting the Vadinar Refinery, and the upcoming EU price-cap regulations set to kick in by September 2025, reports Break Wave Advisors.
Sanctions Pressure Creates Logistical Inefficiencies
While these sanctions have led to some logistical challenges, the structural barriers aren’t as significant. Both Russia and India have strong motivations to bring their imports back up to the first half of 2025’s average of 1.6 million barrels per day. The main hurdle is the lack of non-sanctioned shipping capacity, with current supplies only managing to sustain about 93% of previous volumes.
Limited Vessel Supply and Shrinking Fleet Pool
According to Vortexa, restoring full import volumes would require just 17 more vessels—7 Suezmaxes and 10 Aframaxes. However, the market for buying and selling these vessels is becoming increasingly competitive, as top-tier fleets are sticking to mainstream routes due to high freight rates.
Reliance on Ageing and Dark Fleet Vessels
Older, non-sanctioned Suezmaxes and Aframaxes, typically around 17 to 20 years old, operating in the Wider Mediterranean and the Baltic/Black Sea regions, are likely candidates to be redirected to the Russia-India route. Additionally, some dark fleet vessels that haven’t been linked to sanctioned trades could also shift their operations, as long as they pass India’s vetting process.
Operational Resilience Despite Sanctions
The adaptability of the shadow fleet plays a crucial role in maintaining the flow of crude oil from Russia to India. However, keeping these volumes steady will depend on the liquidity in the sale-and-purchase market for older vessels and India’s readiness to continue imports despite increasing pressure from the US.
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Source: Break Wave Advisors
