Bloomberg: Indiaʼs largest bank is not processing payments for Russian oil, despite US sanctions being lifted

Indiaʼs state-run bank is reluctant to process payments for Russian oil even after the US government temporarily exempted India from sanctions on its imports because the countryʼs largest bank is unsure how long the concession will last.

Bloomberg writes about this, citing sources.

The US Treasury Department on March 5 granted India a 30-day authorization to purchase Russian oil. The decision was made due to the war in the Middle East after months of pressure from Washington to reduce energy imports from Russia.

The state bank believes that doing so could expose it to risks, given its large loan portfolio in global markets, and damage its reputation. This stance underscores how short-term easing of US sanctions does little to restore the financial channels that support India’s purchases of Russian crude.

According to sources, the State Bank of India stopped conducting any transactions related to Russian oil imports after the US imposed sanctions on the two largest Russian producers, Lukoil and Rosneft, in October 2025. But some banks in India were ready to consider such offers late last year, provided that the transactions were not related to companies on the sanctions list and met the requirements of the sanctions.

• In February, the US President Donald Trump lifted an additional 25% tariff on Indian goods imposed over purchases of Russian oil. In response, New Delhi reportedly agreed to gradually phase out direct and indirect imports of Russian oil.
• Meanwhile, interest in Russian oil has recently increased among traders in India and China due to concerns about supply disruptions from the Middle East. China has already increased seaborne purchases of Russian oil to multi-month highs, taking advantage of lower prices.
• On March 9, global oil prices surged above $100 a barrel for the first time in nearly four years due to the war in the Middle East. Trump then announced a partial lifting of sanctions against “certain countries” to lower prices.

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