By Nidhi Verma

NEW DELHI (Reuters). – New Delhi could be at “great risk” if India increases its Russian oil imports, as the United States intensifies sanctions on Moscow in response to Ukraine’s invasion. This is according to a top U.S. administration official.

Although the U.S. current sanctions against Russia are not intended to prevent countries from buying Russian oil in other places, it raises the possibility that Washington might try to reduce other countries’ purchase to normal levels.

It comes just before the two-day Russian foreign minister Sergei Lavrov visit to New Delhi, and while Daleep Singh is on an ongoing U.S. national security advisor for economics trip.

Since the outbreak of war on February 24, Indian refiners have taken advantage of the deep discounts offered by other buyers to buy Russian oil via spot tenders. Since February 24, India has bought at least 13,000,000 barrels of Russian crude oil, compared to nearly 16 million in 2021.

According to a source, the U.S. does not object to India buying Russian oil if it does so at a discounted price and with no significant increase over previous years. The source said that an increase was allowed, but did not provide more details.

A spokesperson for the State Department said that they are aware of discussions between Russia and India regarding oil purchases. According to the spokesperson, “We are continuing to engage our Indian partners and other world countries on the importance for a strong collective effort, which includes sanctions, to push the Kremlin towards an end to its devastating war of choice against Ukraine.”

A spokesperson for the Biden administration stated that they are working together with India, Europe, and other countries in order to limit the negative impact on the energy market from Russia’s invasion. They also encouraged steps to lessen dependence on Russian energy. 

The U.S. Treasury Department did not respond and the White House National Security Council also declined to comment.

U.S. sanctions have reduced Russia’s ability to bring crude oil to the market. Russia is a major producer of about one in 10 global barrels. Paris’s International Energy Agency estimates that from April, 3,000,000 barrels of Russian crude oil could be removed from the global market by sanctions or buyer reluctance.

According to the source, Washington is not concerned if India settles its trade with Russia using rupees. However, Washington will continue to pay dollars if it does so. As long as transactions are in compliance with sanctions and with authorized entities.

India is developing a method to settle trade issues with Russia. This could include payment in rupees.

They must comply with the sanctions, no matter what they pay or how they do it. “If they do not, they expose themselves to great risk,” said the source.

Source said that as long as the sanctions are not violated and purchases aren’t significantly increased, they will be fine.

Russia is under attack from Western nations. They are trying to eliminate it the global economy by imposing international sanctions that include the closing of its SWIFT global messaging system, and restricting the central bank’s dealings. [

The White House has slapped sanctions against Russian entities and individuals among others, crippling Moscow’s economy.

The Biden administration has also banned U.S. imports of Russian energy, including oil. But it has so far not targeted Russia’s oil and gas exports to other countries, as the administration weighs the impacts on global oil markets and U.S. motor fuel prices.

New Delhi has called for an immediate ceasefire in Ukraine but has refused to explicitly condemn Moscow’s actions. It has abstained from voting on multiple U.N. resolutions on the war.

U.S. President Joe Biden said this month India was “somewhat shaky” in acting against Russia.

The U.S. official said India should use the mechanisms created by the United States that exempt energy transactions, and import oil from the ‘permitted entities’.

“We, over the next several days and weeks, are going to be stepping up enforcement of sanctions. We are telling everybody, everywhere around the world to ensure you are compliant with sanctions … this is the message to everyone”.

The U.S. sanctions have granted a waiver till June 24 for settling energy trade with the Central Bank of Russia.