Russia Offers LNG and Coal as India Cuts Sanctioned Oil

The Government of India is reducing its reliance on Russian crude oil following U.S. sanctions targeting major producers like PJSC Rosneft Oil Company and Lukoil. Russian crude exports to India fell 8.4% over the three months ending in September, a decline expected to accelerate as Reliance Industries prepares to suspend all purchases from PJSC Rosneft Oil Company. To stabilize supply, Indian refiners purchased 4 million barrels of Guyanese oil from ExxonMobil, while the Indian government considers reducing Russian oil imports in exchange for a U.S. trade deal that would lower tariffs from 50% to approximately 15%.

In response to the crude oil slump, the Federal Government of Russia is pivoting toward other energy sectors to maintain the partnership. Russian Energy Minister Sergey Tsivilyov proposed expanding liquefied natural gas (LNG) supplies from current and future projects to help India reach its goal of increasing gas to 15% of its energy mix. Currently, Russia supplies India with roughly 3 million tons of LNG annually.

Moscow is also targeting a significant increase in coal exports, aiming for 40 million tonnes by 2035. Additionally, the Russian government is developing an intergovernmental agreement to improve the sea-based supply of oil and petroleum products. Despite the volatility in crude oil trade, Russian officials maintain that India remains a key partner, while Reliance Industries continues to review sanction impacts to ensure domestic energy security.