The U.S. sanctions against two India-registered companies for attempting to export liquefied natural gas (LNG) from Russia’s Arctic LNG 2 project have sparked a fresh wave of scrutiny over India’s involvement in Russian energy trade. Announced by the U.S. Department of State, these sanctions are part of broader efforts to isolate Russia’s energy sector, particularly in light of the invasion of Ukraine and the subsequent Western sanctions imposed on Moscow. The sanctions are designed to curb Russia’s ability to operationalize its Arctic LNG 2 project, a venture expected to produce 19.8 million metric tonnes of LNG annually. The two sanctioned companies, Gotik Energy Shipping Co (Gotik) and Plio Energy Cargo Shipping OPC Pvt Ltd (Plio Energy), are based in Thane, Maharashtra, and have been implicated in deceptive shipping practices to circumvent U.S. sanctions. Their involvement raises important questions about India’s role in facilitating Russian energy exports and the potential implications for India-U.S. relations.
The two companies were sanctioned for their role in managing and operating LNG carrier vessels that attempted to export LNG from Russia’s Arctic LNG 2 project in direct violation of U.S. sanctions. According to the U.S. State Department, Gotik was the registered owner and Plio Energy the commercial manager of the LNG carrier vessel ‘New Energy.’ On August 25, this vessel was involved in a ship-to-ship transfer with another LNG carrier, ‘Pioneer,’ to load LNG from the Arctic project. Just days earlier, the U.S. had blocked the Pioneer, imposing sanctions on the vessel on August 23.
One of the key issues highlighted by the U.S. authorities was the use of deceptive shipping practices, including the shutdown of the vessel’s automatic identification system (AIS) to avoid detection. Shutting off the AIS, which is required under international shipping regulations, prevents the ship’s location from being tracked and raises serious concerns about the intent behind such actions. In addition to the ‘New Energy,’ the State Department identified and sanctioned another vessel, ‘Mulan,’ which was managed and operated by Plio Energy. Both vessels, along with Gotik and Plio Energy, were added to the U.S. Specially Designated Nationals (SDN) list by the U.S. Office of Foreign Assets Control (OFAC). This designation effectively cuts the companies and vessels off from the global financial system and prohibits U.S. entities or individuals from engaging in business with them. Being added to the SDN list is a significant blow for any business, as it severely limits their ability to operate internationally, especially in sectors as globally interconnected as shipping and energy.
This is not an isolated incident. In fact, it follows a similar case in August when another India-registered company, Ocean Speedstar Solutions OPC Pvt Ltd, based in Mumbai, faced sanctions for attempting to transport LNG from the Arctic LNG 2 project. According to U.S. authorities, Ocean Speedstar had acquired two LNG carriers, ‘Pioneer’ and ‘Asya Energy,’ both of which were involved in similar deceptive practices. These vessels also shut off their AIS, manipulated their tracking systems, and engaged in ship-to-ship transfers to load LNG from the Arctic LNG 2 facility.
Satellite imagery confirmed that both the Pioneer and Asya Energy had entered Russian territorial waters in late July and were seen loading LNG at the Utrenneye terminal in early August. The involvement of multiple India-registered companies in these activities suggests a pattern of violations that could have wider geopolitical consequences.
India finds itself in a challenging position, attempting to maintain its historical ties with Russia while simultaneously strengthening its strategic partnership with the United States. The sanctions on Gotik, Plio Energy, and Ocean Speedstar Solutions highlight the complexities of this balancing act. As long as Indian companies continue to engage in activities that violate U.S. sanctions on Russia, India may find itself under increasing pressure to clarify its stance on the issue. The sanctions also raise questions about India’s regulatory framework and its enforcement of international sanctions within its jurisdiction. The repeated violations by India-registered companies suggest a lack of oversight or willingness to crack down on entities that are helping Russia bypass sanctions. If this pattern continues, it could lead to a broader reassessment of India’s role in global sanctions enforcement and its ability to navigate the geopolitical tensions between its partners.
The sanctions imposed on Gotik Energy, Plio Energy, and their associated vessels mark the latest chapter in the complex dynamics of India’s involvement in Russia’s energy exports. As the U.S. continues to ramp up its sanctions regime against Russia, India must carefully navigate the fine line between maintaining its strategic autonomy and avoiding entanglement in actions that violate international sanctions. For India, the stakes are high. Its companies’ involvement in deceptive shipping practices to export Russian LNG could jeopardize its hard-won diplomatic and economic ties with the U.S. As these sanctions demonstrate, Washington will not hesitate to act against entities it believes are undermining its efforts to isolate Russia. India must now decide whether the economic benefits of engaging with Russia are worth the potential risks to its global standing.