India's state-owned refiners are hurrying to make payments for Russian crude oil, aiming to finalise their transactions before new and stricter U.S. restrictions on Russia's oil industry take effect next month, according to sources familiar with the situation.

“The refiners are now aiming to settle payments for the discounted barrels in just two days instead of the previous five days due to pressure to avoid broad US sanctions,” the sources, who asked not to be named since the talks are private, added. The future of at least 4.4 million barrels of Russian crude oil headed to Indian ports is uncertain. At least six sanctioned tankers carrying various types of crude oil are currently en route to ports like Jamnagar, Chennai, Paradip, and Visakhapatnam. They are expected to unload their cargo at these locations before the wind-down period expires, as per ship-tracking data from Bloomberg and Kpler.

This weekend, the Mercury, one of the first ships to arrive, is anticipated to dock at Paradip in eastern India. It is transporting over a million barrels of Urals that were loaded in mid-December at the Sheskharis terminal in Russia. According to Kpler statistics, on January 12, two approved tankers released about 1.4 million barrels at Indian ports in the Gujarat state. While the Arjun delivered to Vadinar, the Zaliv Amurskiy unloaded the Urals at Jamnagar. Indian banks have been requesting more documentation since late last year, doing name screening, and monitoring incoming shipments. Even before Friday's news, they were growing more cautious in anticipation of harsher actions from Washington. The people stated that they are now prepared to settle the amount based on the bill of lading.  

Banks have stopped handling payments in US dollars to avoid complying with the $60-per-barrel price cap on Russian crude that Western nations set in 2022. Instead, all payments for shipments from Gazprom Neft PJSC, which was sanctioned on Friday, are now being made in rubles, according to sources. All crude cargoes carried on sanctioned vessels before January 10, the day sanctions were announced, must be delivered by February 27th, according to the US Office of Foreign Assets Control. Indian purchasers are eager to take advantage of this "wind down" time.

India imports about a third of its oil from Russia. The government is focused on controlling inflation, making the cheaper Russian oil appealing, which has led to fewer purchases from India’s usual oil suppliers. However, recent sanctions, which target two major producers, as well as insurers, traders, and over 180 ships, have put this affordable supply at risk.