Russia oil squeeze: Trump’s 100% tariff threat – should India panic?

Penalty tariffs by the US would imply that Russia’s crude oil imports would now not be a profitable choice for India.

US President Donald Trump’s contemporary threat of 100% secondary tariffs on international locations buying and selling with Russia poses an necessary query – will India’s crude oil provide be hit? At current, India and China are the principle purchasers of Russian oil.India depends closely on imported crude oil, with over 85% of its necessities being met by way of imports. This crude oil is processed in refineries to supply varied fuels, together with petrol and diesel. “We’re very, very unhappy with (Russia). And we’re going to be doing very severe tariffs if we don’t have a (Ukraine peace) deal in 50 days. Tariffs at about 100%, you’d call them secondary tariffs,” Trump stated earlier this week.The secondary tariffs, if the threat materializes, would impose a 100% tariff on merchandise coming into the US from international locations conducting commerce with Russia.Also Read | India-US commerce deal: India receptive to imports of GM farm merchandise utilized in animal feed? Mini deal in works as Trump deadline nearsIn 2019, India stopped its oil imports from Iran when Trump, while serving his first presidential time period, warned of implementing secondary sanctions in opposition to Iranian oil purchasers. Despite comparable threats, China persists with its Iranian oil purchases with out dealing with penalties.But what does this sanction threat by Trump, and even NATO, imply for India? And should India be apprehensive?

India’s Crude Oil Imports From Russia: Top Facts

Whilst the Middle East traditionally served as the first supply for India’s crude oil imports, Russia has emerged because the dominant provider since 2022.Following Russia’s invasion of Ukraine in February 2022, Western international locations largely boycotted Russian crude oil. Subsequently, Russia provided substantial reductions on its crude to safe new consumers. Indian refineries took benefit of those discounted charges, remodeling Russia from a minor provider into India’s principal supply of crude oil, surpassing the normal West Asian suppliers.

Who purchased Russia’s fossil fuels in June 2025?

What Will Be The Impact Of Sanctions on India?

Penalty tariffs by the US would imply that Russia’s crude oil imports would now not be a profitable choice for India. The elevated price of exporting items to the US would far outweigh any advantages of reductions provided by Russia for crude oil buy.In truth, Russia’s reductions on crude oil bought to India have additionally come down step by step. According to Western media reviews, the secondary tariffs would have broader implications for India, affecting all merchandise exports from the buying nation, fairly than the present system the place penalties are restricted to entities conducting enterprise with sanctioned Russian organisations.

Discount of Urals oil costs to Brent over time

Indian refiners might must return to their typical West Asian suppliers and discover new sources like Brazil to compensate for the discount in Russian oil imports. However, these different provides could be costlier, with costs roughly $4-5 per barrel larger, based on a TOI report.The authorities had sought help from two main West Asian nations to safe oil provides by way of different routes when considerations arose about potential disruptions in delivery through the Strait of Hormuz through the latest Israel-Iran battle.According to business specialists, Indian refiners are anticipated to maximise their purchases of discounted Russian crude earlier than the deadline, much like their technique through the Israel-Iran tensions, while concurrently securing different provide preparations.

Should India Be Worried? Simply put, No!

Gaurav Moda, Partner and Leader, Energy Sector, EY-Parthenon India is of the view that India’s three-pronged technique in the previous few years will work in its favour, preserving it comparatively insulated from any main oil provide shock.Firstly, we now have diversified our crude oil procurement markets to past OPEC ++. This has helped carry certainty in oil provide for India, Gaurav Moda tells TOI.“Secondly, over the last few years India has been building strategic oil reserves both domestically and leasing oil reserves. Thirdly, OMCs have also been storing anywhere between 15 days to 3 months of oil reserves,” he stated.“These three steps make India relatively less vulnerable to any oil supply issues caused by geopolitical tensions,” he defined.India is already signalling rising affinity to crude oil imports from varied international locations. India’s crude oil imports from the United States elevated by greater than 50% through the first half of 2025 compared to H1 2024, based on S&P Global Commodity Insights knowledge.Additionally, imports from Brazil noticed an 80% rise throughout the identical timeframe. This signifies Indian refiners’ rising desire for non-OPEC crude sources because the nation goals to diversify its provide channels.Also Read | Trump, NATO tariff threat on Russia’s crude oil: India not apprehensive about sanctions, says Hardeep Puri; ‘if something happens, we’ll…’The renewed diplomatic engagement with the present US administration has additionally sparked a contemporary curiosity amongst Indian consumers for American crude oil provides.Oil Minister Hardeep Singh Puri has additionally dismissed fears of probably influence on India if Russian oil provide is choked by way of secondary tariffs. “I’m not apprehensive in any respect. If one thing occurs, we’ll take care of it,” Puri has stated.“India has diversified the sources of provide and we now have gone, I believe, from about 27 international locations that we used to purchase from to about 40 international locations now,” he said.

Will The US Threat Come Through?

Interestingly, Indian oil industry officials interpret US President Donald Trump’s warning of imposing 100% secondary tariffs on Russia as a strategic negotiation move, believing it would have minimal actual impact on worldwide oil trade or India’s Russian crude purchases.Oil refinery executives are of the view that the tariffs would harm the US as well. If enacted, it would potentially block Russia from participating in the global oil trade, causing oil prices to surge beyond $120 per barrel. This would contradict Trump’s objectives of maintaining low energy costs and could trigger worldwide inflation, they say.Also Read | Trump tariff struggle: Deal or no deal – why it received’t matter a lot for IndiaOil industry leaders told ET that imposing 100% tariffs on India and China for their Russian oil purchases could backfire, as elevated import costs from these countries would in turn affect US consumers in terms of higher prices and create political challenges for Trump’s administration.“This entire tariff sport is about Trump attempting to strike offers with international locations, together with Russia, not about disrupting power commerce or coping with excessive inflation at dwelling,” an executive told ET.Russia maintains significant oil export volumes, shipping approximately 4.5-5.0 million barrels per day (mbd) of crude oil, constituting about 5% of global consumption. Additionally, the country supplies roughly 2 mbd of processed petroleum products to international markets.