(MENAFN- Live Mint) New Delhi: India's largest oil refiner, Indian Oil Corp. Ltd (IOC), on Tuesday said it will“absolutely not” halt buying Russian crude and will also comply with international sanctions. The statement underscores India's attempt to balance energy security with growing global restrictions, even as fresh US measures target major Russian suppliers Rosneft and Lukoil.

“We are absolutely not going to discontinue (buying Russian crude) as long as we are complying with the sanctions. Russian crude is not sanctioned. It is the entities and the shipping lines which have got sanctions,” Anuj Jain, director (finance) at the state-owned firm, said in an analysts' call. He said the company maintains a database of sanctioned entities and will continue sourcing crude oil from non-sanctioned suppliers under the price cap mechanism.

"If somebody comes to me with a non-sanctioned entity, and the (price) cap is being complied with and the shipping is okay, then I will continue to buy it," Jain added.

Also Read | Russian oil: IndianOil to abide by all international sanctions

Supplies from Rosneft and Lukoil, the two Russian energy companies sanctioned last week account for about 55% of the total Russian oil supply to India.

On Monday, the chairman and managing director of Indian Oil Arvinder Singh Sahney had said the company would comply with all sanctions imposed by the international community.

Currently, Russian supplies comprise 19-20% of the company's overall crude oil import basket. Last week, the US imposed sanctions on Rosneft and Lukoil, which supply about 1 million barrels per day (bpd) of the 1.8 million bpd of Russian oil coming into India.

India's public and private refiners are expected to reduce their imports from Russia after the sanctions take effect on 22 November.

On 23 October, Mint reported that the latest sanctions are likely to force Indian refiners to buy from West Asian countries and other markets that do not offer discounts, increasing the country's import bill.

Also Read | How big a hole will Russian oil leave in RIL's margins?

A top government official, on the condition of anonymity said decisions on sources for oil are taken at the company level. "Companies decide which oil is most economical and whether it complies with government norms. They look at both things," the official added.

Asked whether the government provides any direction, the official said:“There's no question of our telling them to buy more or less. I don't have to tell them. They are smart enough to understand. If they buy a cargo that they can't take...If they are buying oil from a sanctioned company, how will they pay? The banker will not allow the payment.”

In case of transactions with sanctioned entities, the banks and financial institutions through which the deals take place will come under the lens of authorities and attract sanctions such as the US Office of Foreign Assets Control (OFAC). These financial institutions may also face punitive action.

Also Read | Russian barrels, global ripples and India's energy crossroads

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