Sanctioned tankers giant passage to India is test case for oil

A vessel owned by sanctioned Russian tanker giant PJSC Sovcomflot is heading to India, a signal that flows using the state-owned company’s fleet to the key Asian market may be resuming after a pause.

Loaded with Urals crude, the Vladimir Tikhonov is en route to Paradip, where the nation’s biggest state-owned processor, Indian Oil Corp., has a refinery, according to ship-tracking data compiled by Bloomberg. The ship is expected to arrive on April 29, and if it discharges, it would be the first Sovcomflot vessel in India since early this month.

Indian Oil didn’t immediately reply to an email seeking comment.

India emerged as a vital outlet for Russian crude after Moscow invaded Ukraine, but last month all of the nation’s refiners said they would stop receiving oil carried on Sovcomflot tankers due to the US sanctions. If Vladimir Tikhonov successfully docks and discharges, that would indicate a shift in the stance taken by the Indian processors. It would also represent a win for President Vladimir Putin as he seeks to fund the war against Kyiv. 

Earlier this month, US officials on a trip to India said that they never expected the country to stop importing Russian oil as it was in Washington’s interest to keep energy flowing to prevent supply shocks. The comments followed a major tightening of sanctions in February, including the curbs against Sovcomflot.

At least two Indian refiners are holding internal discussions on whether to accept oil delivered by Sovcomflot following that visit by US officials, according to company executives who declined to be identified. A successful discharge of Vladimir Tikhonov’s cargo would likely set a precedent for others, they said.

India’s imports of oil from Russia — which have mostly been carried on tankers other than those in the Sovcomflot fleet, including dark-fleet vessels — have been running at about 1.72 million barrels a day in April, the highest level since July, Bloomberg ship-tracking data show.