India’s state-run refiners are making a last-minute push to accelerate payments for Russian crude, fearing that new U.S. sanctions, which come into force next month, will severely disrupt access to discounted oil. The refiners are trying to settle payments in just two days, a significant reduction from the previous five-day window, according to sources familiar with the situation.

The urgency comes as nearly 4.4 million barrels of Russian crude are en route to India. Six tankers carrying various grades of Russian crude are expected to arrive at key ports such as Jamnagar, Chennai, Paradip, and Visakhapatnam, raising concerns that the new sanctions could jeopardize these shipments.

One of the first shipments to arrive will be the Mercury, carrying over 1 million barrels of Urals crude from Russia’s Sheskharis terminal. The ship is set to dock at Paradip in eastern India in the coming days, and its arrival is pivotal for India’s plans to secure discounted Russian oil.

Indian refiners are particularly keen to finalize payments before the deadline of February 27, which has been set by the U.S. Office of Foreign Assets Control (OFAC). This deadline marks the end of a “wind-down” period, after which sanctions on Russian oil deliveries will intensify, with stricter measures potentially hindering trade.

The push to settle payments is also compounded by concerns over rising inflation. As India imports about a third of its oil from Russia, the discounted price of Russian crude has been a key factor in alleviating some of the pressures on domestic fuel prices. This shift has led to a growing reliance on Russian oil, with traditional suppliers like the Middle East and Africa facing stiff competition.

To avoid falling foul of U.S. sanctions, Indian banks have taken extra precautions. Since late 2023, banks have been demanding additional documentation, including name screening and shipment tracking. Payments are now being processed in rubles instead of U.S. dollars, a move to sidestep the $60-per-barrel price cap imposed on Russian oil.

Furthermore, the latest sanctions package, which targets large Russian producers, insurers, traders, and over 180 vessels, has put the future of discounted Russian crude in jeopardy.

India’s reliance on Russian oil has become more pronounced in recent months, as it attempts to balance geopolitical tensions and inflation concerns. However, as the geopolitical situation evolves, refiners face an uncertain future in securing Russian crude at a favorable rate.

With the looming threat of further sanctions, refiners are racing against time to ensure they can continue accessing discounted Russian oil in the short term. The upcoming period will be crucial in determining whether India can maintain its steady flow of Russian oil amid tightening global restrictions.