By: Zahid Jadwat

As the Russian economy is squeezed by an array of sanctions imposed by Western allies of Ukraine, Indian oil companies face a headache sourcing oil and gas.

Several Indian companies including the Oil and Natural Gas Corp (ONGC) have stakes in Russian oil and gas assets. India has been buying more Russian crude since Moscow invaded Ukraine.

However, ONGC is struggling to find a vessel to ship 700,000 barrels of crude from Russia’s Far East due to Moscow’s increasing difficulty to ship the Russian grade known as Sokol, which requires vessels that can break through ice.

This is because shippers are concerned about reputational risk and the increasing difficulty for Russian assets to find insurance coverage.

“The problem here is not so much about finding a vessel. The problem is what happens when you violate those international sanctions,” said foreign policy analyst Sanusha Naidu.

In an interview on Radio Islam, Naidu highlighted the politics behind the situation as well.

“The challenge is that the sanctions are hurting countries like India; who have essentially been… challenged by the countries that have imposed sanctions — particularly the U.S. [which are] saying to the Modi government: ‘you guys have to decide whether you are going to be upholding the sanctions or are you going to allow Russia a loophole here, she said.

“That has been the dilemma for the Modi government because there is this long-standing relationship with Russia, and I think India has also tried to show that it follows an independent foreign policy,” she said.

“The bigger global dynamics here are the value chain and the logistics and transport hub. One of the challenges that India does face, apart from the Black Sea militarised, it’s also the question of whether container fleets can move.”

Listen to the full interview here: