Adani ban on sanctioned tankers puts Russian crude flows to India at risk

India's Adani Group, the country's largest port operator, has announced it will not accept sanctioned tankers at any of its 14 ports. This move, which impacts key crude oil terminals like Mundra, is a direct response to international pressure and will likely present a significant challenge to the import of Russian crude, which accounts for over 50% of Mundra’s crude arrivals.

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India’s multinational Adani Group announced on Thursday that its ports will prohibit the acceptance of any tankers sanctioned by U.S., E.U., and U.K. authorities. This decision, outlined in a document addressed to its trading partners, is a major development in the global oil market and is expected to have a significant impact on Russian crude oil flows to India.

The move is particularly significant due to the Adani Group’s scale. The company operates Mundra port, which has received nearly 400 kbd of crude oil over recent years. Russian crude oil accounts for more than 50% of crude oil arrivals at Mundra during the same period. This makes Mundra a critical gateway for Russian barrels into India, as it serves major refiners like HPCL-Mittal Energy (HMEL) and state-owned Indian Oil, and accounts for close to 10% of India's total crude oil imports.

This announcement comes as the Indian refining sector is already grappling with the effects of sanctions. Indian crude oil imports registered a 10-month low in August amid seasonal maintenance peaks, most notably at Nayara Energy's Vadinar Refinery. The refinery, which is jointly owned by Russia’s state-owned Rosneft and an Indian local partner, was sanctioned by the European Union in late July. Kpler data shows that the refinery's August supply was limited to arrivals from Russia for the first time on record, a clear sign of the procurement challenges it is facing. The Adani decision adds a new layer of complexity to India’s crude sourcing, creating potential compliance pressures for Russian flows into HMEL and other refineries. While freight costs may rise, this is not a certainty; however, refiners may be compelled to explore alternative logistical arrangements or rely more heavily on non-sanctioned vessels, particularly for Russian crude purchases.

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‍Mundra annual crude oil imports by origin country

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