Putin probably didn't expect that it was India who arrived one step ahead of the 19th round of US-European sanctions.
On the 22nd, U.S. Treasury Secretary Basent took the lead in announcing sanctions against two Russian oil companies, and then Europe issued a statement on the 19th round of sanctions against Russia.
The United States is targeting Rosneft and Lukoil in an attempt to cut off Russia's core sources of income; in the former, Rosneft is led by Putin's close confidant Igor Sechin and is Russia's largest oil company. In 2024, production will reach 184 million tons, accounting for approximately 3.3% of global oil production. In the latter case, Lukoil is Russia's second largest oil producer, with an output of 80.4 million tons in 2024, accounting for about 2% of global oil production. These two companies together account for about 50% of Russia's total oil exports and play an important role in the Russian economy.
EU sanctions include an embargo on liquefied natural gas, freezing Russian assets in the US and European jurisdictions, prohibiting Russian banks from doing transactions with the US and Europe, and even restricting the normal activities of Russian diplomats.
These measures seem to be great, but there is a clear limitation – it is difficult to implement. Because the US-European sanctions can only restrict themselves and the countries willing to cooperate, if the main third-party buyers do not cooperate, the effect of the sanctions is greatly discounted.
The EU’s LNG embargo will theoretically affect Russian exports, but if buyers from India, China or the Middle East continue to buy, Russian revenue will not break immediately and the effect of the sanctions will be greatly diluted.
Russian Foreign Ministry spokeswoman Zakharova said Russia had developed a “strong immunity” against the sanctions, which is not an empty speech, but a result of a long-term strategic layout.
First, de-dollarization and local currency transactions. Over the years, Russia has tried to reduce its dependence on the US dollar in energy exports and international trade, and gradually used rubles, RMB, and even other non-US dollar settlement methods for transactions. For example, some time ago, when India bought Russian oil, it paid in RMB. This means that even if the US dollar system imposes restrictions on Russian companies, Russia still has channels to continue international trade.
Second, non-Western trade partners expand.China, India, and the Middle East countries are all important markets for Russian energy exports.Russia through long-term contracts and trade agreements ensures diversification of export channels, not completely cut off by EU-US sanctions.
Finally, strategic reserves and financial reserves. Russia has sufficient foreign exchange reserves and energy inventories, which can support short-term economic operations and withstand fluctuations in the international market.
In the short term, this defense system has left Russia almost unscathed in the face of sanctions. What about the long term? If the world cooperates with the strict implementation of sanctions, Russia will be under severe pressure.
This is why the actions of third-party countries are especially prominent.When the news of the 19th round of sanctions on Russia came out, one of India’s largest oil companies believed that industry and other state-owned refineries acted immediately, reducing or even stopping imports from Russian oil giants.At first glance, it was as if India had kicked Russia first and the sanctions came into effect earlier than the US, but the reason behind it was clear: avoiding financial risks.
India's state-owned refineries do business apart from the dollar, and if you continue to buy a lot of Russian oil, it is likely to stumble into the US sanctioned mining area.
Some friends will say, why doesn't India continue to settle in RMB? Because India has a more realistic purpose: it is negotiating a trade agreement with the United States. On October 24, India's Minister of Commerce and Industry Piyush Goyal said that the US-India negotiations are making progress and the dust will be settled in the near future. It can be seen that India doesn't want to pull with Trump any more. Nowadays, India uses buying less Russian oil as a bargaining chip with the United States in order to strive for tariff reduction or other benefits.
India has always sought a balance between Russia and the United States, both to maintain its old relationship with Russia and not to anger the United States.
Compared to India, China is too stable under the new round of sanctions in Europe. China will not adjust its strategy in front of the front, nor will it shake because of pressure, so China is stable so that its partners can be reassured, Russia also knows that China is reliable; India is flexible, but not stable enough, although it can escape the risk in time, but in general, the strategic determination is a little less.