The United Kingdom on Wednesday targeted Russia’s largest oil companies, Lukoil and Rosneft, as well as 44 other shadow fleet tankers amid attempts to impose energy sanctions and restrict the Kremlin’s revenues. It is also increasing pressure on companies in third countries, including India and China, that are involved in Russian oil trade.
London said that Lukoil and Rosneft were being sanctioned for their role in supporting the Russian government. Under Britain’s Russia sanctions law, the companies are subject to an asset freeze, director disqualification, transport restrictions, and a ban on British trust services, Reuters reported.
The British government considered the two companies to be strategically crucial to the Kremlin, noting that their activities held economic significance and contributed to the state revenues that help Moscow fund its war in Kyiv.
Pressure on third countries like India
British finance minister Rachel Reeves told reporters, “We are introducing targeted sanctions against the two biggest oil companies in Russia, Lukoil and Rosneft.”
She mentioned India and China to say that companies from third countries that facilitate the sale and purchase of Russian oil within global markets will also face increased pressure.
“At the same time, we are ramping up pressure on companies in third countries, including India and China, that continue to facilitate getting Russia oil onto global markets,” she said.
The move also comes just days after UK Prime Minister Keir Starmer’s first official visit to India, where he heaped praises on New Delhi and affirmed the ties between the two countries. He also met with his Indian counterpart Narendra Modi, and finalised on several bilateral trade deals.
Keeves said that there was “no place for Russia in global markets”, adding that Britain would take all necessary measures to stop Moscow from funding its war in Ukraine.
Russia’s response
The Russian embassy in London stated that Britain’s sanctions would backfire by destabilising the global energy markets and subsequently increasing the costs for British businesses and consumers.
“Contrary to the loud assurances of British leaders, these restrictions will not have any impact on the Russian foreign policy course,” the embassy said in a statement.
Britain’s sanctions on Russian oil
The new sanctions have been slapped by Britain on Lukoil, Rosneft, and 44 shadow fleet tankers. These include 51 ships, including those within the shadow fleet, and individuals and companies across various sectors such as energy and defence.
Shadow fleet is a network of old tankers that official have reportedly said are used to avoid sanctions on Russian oil.
Britain said that these sanctions are also imposed on seven liquefied natural gas (LNG) tankers and the Chinese Beihai LNG terminal, which imports cargoes from the sanctioned Russian Arctic LNG2 facility.
Among the sanctioned companies is Nayara, a Russian-owned refinery based in India’s Mumbai. Rosneft holds the biggest share of the firm.
Additionally, the European Union has already slapped sanctions on Nayara, which is struggling to sustain operations. The refiner has condemned the EU sanctions.
What experts say
Traders familiar with Russian oil sales said that the British sanctions will reduce the availability of ships and ship insurance for Russia, as British-based companies were transporting and insuring Russian oil on their routes to Asia.
This, they said, means that more Russian oil trade would shift towards the shadow fleet, which uses non-Western insurance and services.
Estimates by Western experts show that the number of ships in the shadow fleet has already surpassed the 1,500-mark, indicating that there is no shortage of ships for transporting Russian oil.
However, the past shows a different picture. Many Indian and Chinese ports have previously refused to unload tankers from the shadow fleet, complicating the Russian oil trade.
Since Russia’s full-scale invasion of Ukraine, the shadow fleet has been increasingly sanctioned by Britain, the United States and the European Union.
India’s stance on Russian oil
Russian oil became a focal point of US President Donald Trump’s tariff tirade against India. The Republican leader, who first imposed a 25 per cent levy on Indian goods, with an unspecified penalty, doubled the tariff to 50 per cent. He said that the additional tariff was imposed due to India’s Russian oil purchase.
Trump aides like Peter Navarro and Howard Lutnick have issued several statements regarding the New Delhi-Moscow ties and India’s purchase of oil from Russia.
However, India has consistently maintained its stance on the matter. The Ministry of External Affairs clarified that India is “guided by what is on offer in markets and prevailing global situation” when it comes to energy sourcing.
In terms of defence requirements, the MEA said the sourcing is determined by “national security imperatives and strategic assessments”.
New Delhi affirmed its steady and “time-tested” partnership, while also urging that India’s ties with any other country should not be judged through the prism of a third nation.
Trump’s big claim on India
Donald Trump made a massive claim on Wednesday and said that PM Modi had “assured” him that India would stop the purchase of Russian oil. He said, “…I was not happy that India was buying oil. And he (Modi) assured me today that they will not be buying oil from Russia. That’s a big stop.”
The US President further stated that he would get China “to do the same thing”.
He later affirmed his ties with PM Modi, saying that he shares a “great relationship” with the Indian leader.
“There will be no oil. He’s not buying oil,” Reuters quoted Trump as saying. He added that the change would not take place immediately, but “within a short period of time”.
