Follow Bloomberg India on WhatsApp for exclusive content and analysis on what billionaires, businesses and markets are doing. Sign up  here .Russia is sending cargoes of sanctioned oil to India on tankers that have been blacklisted by the US Treasury — setting up an acid test of Moscow's ability to get around aggressive measures imposed by Washington earlier this month.

Russia has suffered a major economic setback, after China and India halted their purchases of Kremlin oil. Oil and gas revenues are vital sources of revenue, accounting for between a third and half of Russia 's federal budget over the last decade. In particular, these revenues play a key role in helping Putin to finance his war in Ukraine.

Indian Oil remains confident about energy availability for India saying US sanctions imposed on Russian oil would have "marginal impact" on crude availability for the country, said Chairman A S Sahney.

The United States has clarified to India that tankers loaded with Russian oil have to discharge by Feb. 27 under the latest sanctions targeting Moscow's oil revenue, India's oil secretary Pankaj Jain told reporters at an event.

Following Russia's invasion of Ukraine in 2022, India became a major buyer of Russian crude oil that was widely sanctioned by the West. That may be about to change.

The crude oil market is adapting quickly to the new sanctions against Russia's shadow fleet of tankers, albeit by creating both short- and medium-term winners and losers.

Since the Ukraine war, India has become the second largest buyer of Russian crude oil, owing to the hefty discount Russia offered to bypass sanctions. Prior to the war, India secured most of its oil from the Middle East, with Russia not even featuring among India’s top 20 partners.

Russia has continued to send cargoes of crude oil to India on tankers that have been sanctioned by the US, Bloomberg reported on Tuesday. This situation presents a crucial test of Moscow’s ability to circumvent the stringent sanctions implemented by Washington earlier this month.