Sanctions risks: India’s central bank avoids payments for Russian oil
11 March 13:20
India’s largest bank, State Bank of India, refuses to process payments for Russian oil, even despite temporary permission from the US government for such transactions.
This was reported by Bloomberg, citing sources familiar with the situation, according to "Komersant Ukrainian".
According to them, the bank is unsure how long the sanctions relief will last, so it does not want to take on potential financial and reputational risks.
Temporary easing of US sanctions
On March 5, the US Treasury Department granted India a 30-day permit to purchase Russian oil.
This decision was made against the backdrop of tensions in the energy markets due to the war in the Middle East.
Previously, the US had been pressuring India for several months to reduce its energy imports from Russia.
However, the short-term permission did not change the position of India’s largest bank.
Why the bank does not want to take risks
According to sources, the State Bank of India has a significant loan portfolio in international markets, so it tries to avoid transactions that could lead to secondary sanctions or reputational damage.
This position shows that even temporary easing of US sanctions does not fully restore the financial channels through which India paid for Russian oil.
Sanctions against Russian companies
According to sources, the Indian state bank stopped conducting transactions related to Russian oil imports after the US imposed sanctions on two of Russia’s largest oil companies in October 2025:
- Rosneft
- Lukoil
At the same time, some Indian banks were considering such transactions at the end of last year, provided that they were not related to companies on the sanctions list.
Political context
In February, US President Donald Trump lifted an additional 25% tariff on Indian goods, which had previously been imposed due to the purchase of Russian oil.
According to sources, India agreed in response to gradually reduce direct or indirect imports of Russian oil.
Why demand for Russian oil is growing
Despite sanctions, interest in Russian oil has recently grown among traders from India and China.
This is due to concerns about possible disruptions to energy supplies from the Middle East.
In particular, China has increased its maritime purchases of Russian oil to multi-month highs, taking advantage of lower prices.
Rise in global oil prices
On March 9, amid the war in the Middle East, global oil prices rose sharply and exceeded $100 per barrel for the first time in nearly four years.
