A US Treasury official said Thursday (American time) that many India and China-backed firms, including banks and refineries, were taking necessary steps to comply with US sanctions ties to Russian imports. As of October, both countries remained the two biggest buyers of Russian oil.
These remarks come alongside the release of a Treasury Department analysis stating that the Donald Trump government’s sanctions have choked Russia’s oil industry, which has served as key source of Kremlin funds amid the country’s ongoing war in Ukraine.
The unnamed Treasury official said both Indian and Chinese entities had grown conscious of the sanctions in place, and are “risk averse, do recognize the importance of the relationships with the West, and are moving to comply,” as quoted by CBS News.
US sanctions on Russian oil giants already bringing in results?
“Sanctions on Russian energy firms Lukoil and Rosneft are having their intended effect of dampening Russian revenues by lowering the price of Russian oil and therefore the country’s ability to fund its war effort against Ukraine,” Treasury’s Sanctions Economic Analysis Division’s November 17 memo stated.
Given the current circumstances, the official release noted that the US sanctions had pushed the prices tied to ‘ Russian oil trading “well below other international prices.”
Further details shared in the analysis indicated that Russian oil prices had shrunk by at least 21% as lesser amounts of the same were leaving the country amid newly announced sanctions. The US official further detailed that a significant number of top buyers of Russian oil from India and China had openly voiced their decision to stray away from the purchases since last month’s impositions on two crucial companies, Lukoil and Rosneft.
According CBS’ review of the licenses tied to these companies, the US Treasury has hit Lukoil with new deadlines. A waiver for its deals in Bulgaria was extended through April 29. Additionally, a December 13 date was finalised while extending the deadline on the firm’s transactions pertaining to retail service stations and contracts tied to the sale of its international assets.
International entities have also amplified their requests for the Treasury to extend the November 21 deadline, by which companies are expected to wrap up their association with Lukoil and Rosneft.
Big moves on the US vs Russian oil front – India and China in the loop
The revelation comes hot on the heels of India’s conglomerate giant Reliance Industries Limited disclosing that it would halt Russian oil imports at the export-focused part of its Jamnagar oil refinery, as per Bloomberg.
While its last shipment of Russian crude was taken on Thursday (US time), the company divulged that some purchases it made prior to US sanctions threat would be discharged at a different of part of the facility.
Moreover, Russian oil giants Lukoil and Rosneft were also targeted in the sanctions announced October 22.
On top of that, Trump made the serious declaration that he was on board Republicans’ plan to release a bill that would impose hefty 500% tariffs on imports from countries still failing to call off their trade partnerships with Russia.
“So any country that does business with Russia will be very severely sanctioned,” the US president recently told reporters. With China and India already on top of the target list, Trump suggested adding Iran to the list as well.
US Treasury Secretary Scott Bessent has repeatedly mounted severe accusations on India and China for funding the “war machine” Russia. Last month, he claimed that intensified US sanctions could chop the country’s oil revenue 20% or 30%. Although the impact has yet to be formally ascertained, the Treasury official affirmed sanctions were expected to make a difference.