Sanctions? Never heard of them. Oil just changed its passport

🛢 After the U.S. sanctions against major Russian producers (primarily Rosneft and Lukoil, as we reported here), India’s largest importer of Russian oil, Reliance Industries, has noticeably increased oil purchases from Middle Eastern countries and the U.S. to partially replace the previously supplied Russian flows. This is noted by traders and major media outlets.

Where the oil comes from now and why

• Where they are sourcing oil now and why Reliance has a long-term agreement with Rosneft (around 500,000 barrels per day, according to reports), but new US sanctions are forcing the company to redistribute supplies and seek alternatives on the spot market — primarily in the Middle East and the US. In recent weeks, the company has purchased several spot cargos from the Middle East and Brazil, with deliveries expected in December–January.
• The reasons: compliance with new requirements from Western counterparties and insurance mechanisms, as well as political pressure from the US, which could affect export-oriented business lines.

But there is a nuance — “the same, just through third parties.”

Several experts and market sources emphasize: this is Russian-origin oil, but now it is often resold through intermediaries in Turkey, the United Arab Emirates, and other countries, or undergoes “repackaging” and document relabeling — to circumvent restrictions and limit traceability of origin. Such schemes include: reselling on paper (changing the seller), changing vessels and reflagging, transshipment through transit terminals, and mixing in tankers.

Examples of practices:

• Transit through terminals (e.g., Turkish terminals, where cargos can be redirected with minimal processing).
• Use of “intermediaries” and traders — small and medium trading firms that take on risk, documentation, and logistics. Since the end of 2022, this kind of trade has concentrated among several large traders, as smaller participants left due to rising costs and risk.

Scale — what the data shows:

• Bloomberg and other agencies report that Reliance purchased millions of barrels on the spot market in October, mostly Middle Eastern cargos, with some deliveries expected in December–January.
• At the same time, Bloomberg and Reuters estimate that Russian oil flows to Indian refineries could decrease “almost to zero” due to sanctions if the timing and actions of sanctions continue — this would significantly alter the supply balance and force the search for alternatives.

Why intermediaries use Turkey and Middle Eastern countries:

• Turkish terminals and trading schemes have long appeared in analyses as a way to “reassign origin” of oil: the product can pass through a terminal, where documents are formally changed, while actual physical processing or blending is minimal. This has allowed some batches to maintain market access despite restrictive measures in other jurisdictions.
• Additionally, hubs like Dubai/UAE traditionally serve as platforms for contract restructuring and financing — making them convenient “transshipment” points. Analysts note that such routes are vulnerable to further tightening of sanctions.

Risks for Reliance and India:

1. Legal and financial — new sanctions and secondary measures from the US/EU can lead to fines, restrictions on banking operations, shipping and cargo insurance issues. Many Western insurers and banks refuse to work with “high-risk” chains.
2. Reputational — companies involved in sanction-evasion schemes risk losing access to Western capital markets and partners.
3. Operational — transshipments, logistics changes, and extended supply chains increase costs and risk of delays. If control is sharply tightened, intermediaries may “drop out,” leaving buyers without barrels.

Why India was still buying Russian oil — economic context:

• Russia offered significant discounts on oil after 2022; this helped Indian refineries replenish export stocks and ensure local energy and fuel stability. Reliance and other Indian refineries increased Russian oil purchases in 2023–2025 to secure margins.
  
  
  
• Politics: for India, this is also a matter of energy security and diplomatic balance — New Delhi seeks to maintain strategic autonomy, while simultaneously risking external pressure.

What this means for the oil market and prices:

In the short term, supply restructuring (redirecting to the Middle East, US) can support the global market and keep prices within range; in a more severe scenario — if flows from Russia really fall “to zero,” this could create a shortage and push prices up. Bloomberg and Reuters note that policymakers are trying to prevent a sharp price spike.

How to monitor further (practical tools):

• Fleet and cargo tracking services: Kpler, Vortexa, TankerTrackers — show tanker movements, transshipments, and anomalies in flows.
• Terminal monitoring: data on oil receipts at Dörtyol (Turkey) and major Middle Eastern ports often provide clues about transit operations.
• Alerts from Reuters / Bloomberg / FT — these outlets promptly publish confirmed data from traders and industry sources.

🔍 Summary:

Reliance has indeed increased purchases of oil on the spot market (Middle East, US, etc.) after sanctions against major Russian companies — confirmed by Bloomberg and other agencies.

At the same time, part of the previous volumes of Russian oil may “continue” flowing through chains of intermediaries and transit terminals (e.g., in Turkey and the Middle East) with document relabeling — a classic scheme to reduce traceability of origin.

This creates both operational opportunities (short-term supply, cheap raw material stock) and significant legal/reputational risks under increasing sanction pressure.