India is staring at an ‘oil shock’ as U.S. sanctions on Russian crude loom
Russia’s President Vladimir Putin (R) speaks with India’s Prime Minister Narendra Modi (L) during a visit to the shipyard Zvezda, as Rosneft Russian oil giant chief Igor Sechin (C) accompanies them, outside the far-eastern Russian port of Vladivostok on September 4, 2019, ahead of the start of the Eastern Economic Forum hosted by Russia.
Alexander Nemenov | Afp | Getty Images
India’s days of buying cheap Russian oil could be over.
Sweeping sanctions by the U.S. against Russia’s energy companies and operators of vessels that transport oil will complicate Indian efforts to keep importing cheap Russian crude and could push up inflation in Asia’s third-largest economy, analysts said.
The country could be looking at a potential oil shock, said Bob McNally, president of Rapidan Energy Group.
“India will be more affected than China by sanctions, since India imports much greater amount of its oil from Russia than China,” he told CNBC.
Last Friday, the U.S. Treasury announced sanctions on two Russian oil producers, along with 183 vessels which are primarily oil tankers that have been shipping barrels of Russian crude. At present, tankers sanctioned by the U.S. are still permitted to offload crude oil until March 12.
The South Asian nation imported a significant 88% of its oil needs between April and November 2024, little changed from a year earlier, according to government data. Around 40% of those imports came from Russia, data from trade intelligence firm Kpler showed.
Out of the newly sanctioned 183 tankers, 75 of them have transported Russian oil to India in the past, according to data provided by Kpler. Just last year alone, the 183 sanctioned tankers transported around 687 million barrels of crude, of which 30% were shipped to India.
“Most of these barrels went to Indian refiners and, hence, the impact will likely be largest there,” BNP Paribas’ senior commodities strategist Aldo Spanier said in a research note following the sanctions.
The new U.S. sanctions were deeper and broader than foreseen by markets, and the disruptions are expected to amplify, Spanier added.
India’s Ministry of Petroleum and Natural Gas did not respond to a CNBC request for comment.
Oil prices year-on-year
The sanctions are also coming at a time when India is tipped to surpass China as the number one oil consumer in the world in 2025, accounting for 25% of total oil consumption growth globally.
Increasing demand for transportation fuels and home cooking fuels is set to spur this growth of 330,000 barrels per day this year — the most of any country, forecasts by the U.S. Energy Information Administration showed.
India consumed 5.3 million barrels per day in 2023, EIA’s most recent data showed. This consumption is expected to have increased by 220,000 barrels per day last year.
India wasn’t always this dependent on Russian oil.
As recently as 2021, Russian oil accounted for just 12% of India’s oil imports by volume. By 2024, that share had spiked to 37.6%, Muyu Xu, senior oil analyst at Kpler told CNBC.
The catalyst for increased oil imports was the Ukraine war, which prompted some Western countries to impose sanctions against Russia and curtail their purchases of Russian crude. As prices of Russian oil fell, India was able to hoover up supplies cheaply from companies that were not under sanctions.
The discount of Russia’s crude, Urals, to the global benchmark Brent has averaged around $12 per barrel from last August to October, according to S&P Global’s most recently published data last November. In 2024, Russia’s Urals were also cheaper by $4 per barrel compared to oil from Iraq, one of India’s main sources of crude oil imports, data from Kpler showed.
“If India were to fully comply with U.S. sanctions, we could see a sharp decline in Russian crude arrivals in February and potentially March,” Xu added.
Supply disruptions to India could be as high as 500,000 barrels per day, Rystad Energy’s senior analyst Viktor Kurilov shared via email.
No more cheap alternatives?
While the impact may eventually be mitigated as affected importers scramble to source alternative suppliers in the Middle East, some industry watchers say that the relief might still take a few weeks to months to materialize.
Even then, the price of oil from these alternative sources will not be as cheap. The world’s crude benchmark Brent recently advanced to a five-month high to around $80 per barrel following the announcement of the sanctions, after a year of languishing from oversupply and weak demand.
Prices of Middle Eastern crude, which are amongst India’s alternatives, have also surged this week, data provided by Kpler suggested.
“Depending on how quickly Russia resolves its logistical challenges and how cooperative India and China remain with the sanctions, oil prices could spike for a few weeks,” Kpler’s Xu said.
Additionally, as Donald Trump’s inauguration draws closer, the world’s supply of cheap Iranian crude, is also facing the risk of tighter sanctions. Iran made up 4% of the world’s oil production in 2023, according to an EIA report released last year.
“It is [also] a bit of a double whammy for the key importer [India] as Iran will likely face new sanctions pressure with the incoming Trump administration,” Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC.
If the new sanctions are coupled with a potential curb on Iranian crude, Brent prices could rise even higher to $90 per barrel, Goldman Sachs wrote in a note published after the announcement of the sanctions.
An Indian economy pain point
The Indian economy is “significantly vulnerable” to fluctuations in oil prices, a research paper published in 2023 established. Domestic retail prices of gasoline and diesel surge “like rockets” in response to rising crude oil prices, Abdhut Deheri, assistant economics professor at the Vellore Institute of Technology and M. Ramachandran from Pondicherry University’s department of economics said in the research paper.
Analysis from the Reserve Bank of India in 2019 found that every $10 per barrel rise in oil prices could lead to a 0.4% increase in headline inflation.
“High oil prices, if passed to consumers, could further hurt their purchasing power at a time when income and GDP growth have slowed,” Dhiraj Nim, an economist at ANZ.
However, weak consumer demand could deter producers from passing on the cost burden to consumers, which means it could dent companies’ profits instead, Nim added. Although if the government chooses to shoulder the additional costs, it would strain its finances.
Not only will China and India have to pay more for the oil they consume, they will need to pay more to have it delivered to their shores because oil tanker rates have also risen, said Andy Lipow, president of energy consultancy Lipow Oil Associates.
Combined with a stronger U.S. dollar and weaker rupee, the impact on the India economy will be magnified, said Lipow.
India’s rupee recently plunged to a record low as a result of pressure from a strong greenback and selling by foreign portfolio investors.
The country is no stranger to protests over high fuel prices. In 2018, widespread protests across the country against record-high petrol and diesel prices led to the closure of businesses and schools in several regions.
Mammoth Solar, a 1.3 gigawatt (GW) solar farm in northern Indiana, is now powering into its biggest construction phase yet, cementing its place as one of the largest solar projects in the US.
The solar farm is set to increase Indiana’s solar capacity by more than 20% once it’s fully online. And with construction ramping up this month, developer Doral Renewables has given Bechtel Full Notice to Proceed on the design, engineering, and construction of three major phases of the project: Mammoth South, Mammoth Central I, and Mammoth Central II. Together, these phases will generate 900 MW of clean energy.
That’s enough electricity to power around 200,000 homes with clean energy, helping Indiana shift away from fossil fuels while boosting the local economy.
Construction is already underway, and over the next two years, Bechtel will install around 2 million solar panels, with about half of them made in the US. The company is also handling all engineering, procurement, and construction work, using its digital project management tools and autonomous tech to keep everything on track.
At the peak of the buildout, Mammoth Solar is expected to create over 1,200 jobs, with at least 15% of those set aside for apprenticeships.
Bechtel says its success will hinge on strong collaboration with local trades and vendors. The company is working closely with craft professionals and is committed to being a reliable community partner throughout construction.
Once the solar farm is complete in 2027, Doral Renewables plans to roll out agrivoltaics across the site. That means livestock grazing and crop cultivation will happen right alongside energy production, giving farmers in the area a way to keep working their land while supporting clean energy development.
Read more: Solar adds more new capacity to the US grid in 2024 than any energy source in 20 years
If you live in an area that has frequent natural disaster events, and are interested in making your home more resilient to power outages, consider going solar and adding a battery storage system. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*
FTC: We use income earning auto affiliate links. More.
BYD is about to launch an even smaller EV, but this one’s a little different. It’s BYD’s first kei car. You know, those tiny vehicles that dominate Japan’s city streets? BYD’s mini EV was just spotted out in public, giving us our first real look at the upcoming kei car.
BYD’s first mini EV was spotted in public
Last week, rumors surfaced that BYD was developing its first kei car, which would compete with top-selling models from Nissan, Honda, Mitsubishi, and other Japanese brands.
Kei cars, or “K-Car,” as they are sometimes called, are a class of ultra-compact vehicles that cannot be longer than 3.4 meters (134″). To put that into perspective, BYD’s smallest EV currently, the Seagull (called the Dolphin Mini overseas), is 3,780 mm (148.8″) long.
The mini vehicles are ideal in Japan because they are so small, making it easy to get around tight city streets. They are also more affordable and efficient than larger vehicles.
BYD’s mini EV was spotted for the first time during a road test this week by IT Home (via CarNewsChina), revealing a familiar look. It has that boxy, compact look of a typical kei car with sliding side doors.
According to reports, BYD is developing a new platform for the model. It will reportedly include a 20 kWh battery, good for 180 km (112 miles) WLTC range. By using its in-house Blade LFP batteries, BYD is expected to have a cost advantage.
BYD’s upcoming mini EV is expected to start at around 2.5 million yen, or about $18,000. That’s about the same as the Nissan Sakura (2.59 million yen), Japan’s best-selling EV last year.
既出ですがBYDの日本向けEV軽自動車と言われているフロントとリアからのスパイショット。 pic.twitter.com/CcV5pihpWc
— 主夫まぬか (@syufumanuka) May 16, 2025
Last year, around 1.55 million kei cars were sold in Japan, accounting for roughly 40% of new vehicle sales. Honda’s N-Box was the top-selling kei car (EV or gas) for the third straight year.
As Nikkei reported, some are already calling BYD’s electric kei car “a huge threat.” A Suzuki dealer said, “Young people do not have a negative view of BYD. It would be a huge threat if the company launches cheap models in Japan.”
BYD already sells several electric cars in Japan, including the Atto 3 SUV, Dolphin, and Seal. Last month, the company launched the new Sealion 7 midsize electric SUV, starting at 4.95 million yen ($34,500).
Although Japan isn’t really an EV hot spot, with sales falling 33% in 2024 to just under 60,000 units, BYD sees an opportunity.
By making virtually every car component in-house, including batteries, BYD can offer EVs at such low prices while still making a profit. BYD’s cheapest and best-selling electric car, the Seagull, starts at under $10,000 (69,800 yuan) in China.
With new smart driving and charging tech rolling out, BYD’s electric cars are getting smarter and even more efficient.
Can BYD’s mini EV compete with Japanese brands? At the right price, it may have a chance. Check back soon for more on the upcoming kei car. We’ll keep you up to date with the latest.
Source: Sina, CarNewsChina
FTC: We use income earning auto affiliate links. More.
Ford’s electric pickup truck is back at the top. The F-150 Lightning is once again the best-selling electric pickup in the US after overtaking the Tesla Cybertruck in the first quarter.
Ford’s F-150 Lightning is the best-selling electric pickup
After launching in 2023, Tesla’s Cybertruck quickly outpaced the Lightning to become America’s top-selling EV pickup last year.
Since Tesla doesn’t break down regional sales, registration data gives us our best estimate. The latest registration data from S&P Global Mobility (via Automotive News) shows that the F-150 Lightning retook the title in March and the first quarter of 2025.
Ford’s electric pickup notched 2,598 registrations in March, topping the Tesla Cybertruck with 2,170. In the first quarter, the F-150 Lightning remained ahead with 7,913 registrations, compared to the Cybertruck’s 7,126.
Although the Cybertruck was the fifth top-selling EV in the US last year, it didn’t even crack the top ten in March. It placed ninth through the first three months of 2025, behind the Volkswagen ID.4.
While Tesla and Ford remained the leaders in the electric pickup market, several new models are gaining momentum. According to the most recent numbers from Cox Automotive, GM sold 2,383 Chevy Silverado EVs and 1,249 GMC Sierra EV models in Q1. Meanwhile, Rivian sold 1,727 R1Ts during the quarter.
Earlier today, Electrek reported that new models, including the Honda Prologue and Chevy Blazer EV, helped drive EV registrations up 20% in the US in March.
Although the Lightning reclaimed the crown from Tesla, Ford’s electric pickup isn’t exactly flying off the lot. Ford reported Lightning sales fell 16% to just 1,740 units in April. Through April 2025, Ford has sold 8,927 electric trucks, down 9% from the 9,833 it handed over last year.
Electrek’s Take
To be fair, Tesla is still ahead by a wide margin in the US. The S&P numbers show Tesla had over 51,000 registrations in March, up 1% after two months of lower YOY growth.
GM’s Chevy surpassed Ford to become the second-best-selling EV brand with nearly 8,500 registrations, an increase of 274% from last year. Ford dropped to third with 7,361 registrations.
Although it’s just one quarter, it’s starting to show how Tesla CEO Elon Musk’s political antics are likely impacting sales. After the Cybertruck’s initial hype, it appears many buyers are opting for traditional pickups, like the F-150 Lighting.
Meanwhile, Ram is delaying its first electric pickup, the 1500 REV, again. Ram is pushing production back until summer 2027, saying it’s “extending the quality validation period.” The plug-in hybrid (PHEV) Ramcharger will also be delayed until the first quarter of 2026.
After pulling the Ramcharger ahead of the fully electric version last year, Stellantis blamed weak demand for EV pickups in the US.
FTC: We use income earning auto affiliate links. More.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway