Indian Refinery Linked to Steel Magnate Lakshmi Mittal Acquired Russian Oil via Sanctioned Vessels

FT investigation finds Indian refinery received four shipments worth $280mn transported via sanctioned vessels

New Delhi/London

An Indian oil refinery co-owned by steel magnate Lakshmi Mittal's energy arm purchased almost $280mn of Russian crude transported on sanctions-listed vessels, according to an FT analysis of satellite imagery, shipping data and customs records.

HPCL-Mittal Energy yesterday announced it would cease buying Russian crude, hours after the Financial Times revealed online that the venture had received four shipments of oil from Russia this year aboard US and EU-blacklisted tankers.

The crude was shipped between July and September from the Arctic port of Murmansk to the Gulf of Oman, with the final leg into India undertaken by the Samadha, a vessel not on US sanctions lists but blacklisted by the EU.

All ships involved sought to conceal their movements through deceptive practices, either disabling their transponders or broadcasting false positions — tactics common in efforts to circumvent western sanctions on Russian oil.

Emily Kilcrease, director at the Center for a New American Security and former US trade official, said: "If I were advising the buyer, I would want to make sure that you had enough visibility in the full transport chain to make sure that you're not one hop or two hops from a sanctioned activity."

Political pressure mounts

The revelations come as Washington seeks to tighten restrictions on Indian companies purchasing Russian crude. Last week, the US imposed sanctions on Rosneft and Lukoil, Moscow's two leading oil producers, in an effort to force Russian president Vladimir Putin into negotiations with Ukraine.

The move particularly affects Indian refiners, as the country has become the largest buyer of seaborne Russian crude after other markets shut out the product following Russia's full-scale invasion of Ukraine in 2022.

India purchased 1.7mn barrels per day of Russian crude this year, representing 34 per cent of Russia's 5mn b/d of seaborne exports, according to data analytics group Kpler. China is the second-largest buyer.

In August, Washington imposed additional tariffs on Indian imports, deeming them "necessary and appropriate" because of India "directly or indirectly importing Russian Federation oil".

Joint venture structure

HMEL is a joint venture between Mittal Energy and Hindustan Petroleum Corporation Limited, an Indian state company, each holding 49 per cent. The remaining 2 per cent is held by financial institutions, according to the company.

In a statement issued after the FT's online publication, HMEL said it "had already taken the decision to suspend further purchases of Russian crude" in response to "new restrictions on imports of crude oil from Russia by the US, EU and UK".

The Guru Gobind Singh refinery, India's 10th largest with capacity to process 11.3mn tonnes annually, receives crude through a 1,000km pipeline from the port of Mundra in Gujarat. According to Kpler, HMEL has taken delivery of 47mn barrels of Russian crude at Mundra so far this year.

'Shadow fleet' tactics

The four deliveries identified by the FT followed a similar pattern. The Samadha made repeated trips to Mundra, while its transponder signals claimed it was shuttling to and from Oman for loading operations.

Satellite images analysed by the FT and compared with transponder data show the vessel often sent falsified positions disguising its true location. While broadcasting its presence near Oman, the Samadha was actually meeting other tankers further offshore for ship-to-ship transfers.

Each satellite image shows a large, grey vessel consistent with the Samadha at anchor in the Gulf of Oman, side by side with another tanker — a position suggesting cargo transfer. The vessels appear to be the Belgorod, Danshui, Dignity and Primorye, all previously added to US sanctions lists.

Tanker Trackers, a maritime intelligence company, confirmed the identity of the ships during its monitoring of the Gulf of Oman — an area it typically surveys for ship-to-ship transfers involving Iranian oil.

In each case, the sanctioned vessels sailing from Murmansk went "dark" as they approached the Gulf of Oman, switching off transponders for between three and six days — the exact window during which each photographed transfer occurred.

Documentary evidence

Customs records filed by HMEL with Indian authorities, seen by the FT, show purchases from Varda LLC, a St Petersburg oil supplier. Three forms explicitly name the Samadha as carrier. The filings report the four shipments had a total value of $277mn.

The records also indicated all shipments were for two grades of Arctic oil — Novy Port and Arco. In January, the US targeted Russia's Arctic oil business with sanctions, announcing curbs on tankers and other infrastructure affecting Arco and other grades.

The FT was unable to contact the Samadha's registered owner and manager, Erika Freight Limited, a company about which almost nothing is known beyond its relationship with the vessel. The ship has since been placed under UK sanctions. Its owner shares a registered address in the Seychelles with 13 other so-called shadow fleet vessels.

The FT could not reach Varda LLC in St Petersburg, which has no online presence and lists no contact details in Russian corporate records.

Mittal's business empire

Best known as executive chair of ArcelorMittal, the world's largest integrated steel and mining group, Mittal has built a globe-spanning business empire. The billionaire, who has sat on Goldman Sachs' board since 2008, told associates this year he intended to leave the UK over changes to tax rules affecting non-domiciled residents.

Kilcrease noted the economic incentives driving such purchases: "The major consumers of this oil really want [it]. They've been willing to take a certain amount of risk of coming into the US Treasury's sights."

HMEL joins a growing list of India's major refiners that have had to recalibrate their imports of Russian oil as western sanctions tighten and diplomatic pressure intensifies on New Delhi to curtail energy purchases that fund Moscow's war effort.

The case underscores the challenges facing western governments in enforcing sanctions on Russian oil, as buyers and sellers exploit jurisdictional grey areas and opaque corporate structures to maintain trade flows worth billions of dollars.