Key provider: In FY25, Russia accounted for round 35 per cent of the overall crude oil procured by India.
| Photograph Credit score:
Dado Ruvic
US President Donald Trump has endorsed a Invoice that proposes a 500 per cent tariff on international locations importing oil from Russia, a growth that may destabilise India’s commerce with its largest crude oil provider.
The US Invoice, if handed, would severely impression India’s crude oil commerce with Russia. The crude oil commerce between the 2 international locations has risen for lower than 2 per cent of India’s complete imports in 2022 to as excessive as 40 per cent in a span of a few years. In FY25, Russia accounted for round 35 per cent of the overall crude oil procured by India.
Responding to reviews on additional sanctions on Russian crude, Indian Oil Minister Hardeep Singh Puri defined that Russian oil was by no means underneath international sanctions. Wise choice makers world wide have been conscious of the realities of world oil provide chains and the way India was solely serving to the worldwide markets by shopping for discounted oil underneath a worth cap from wherever it may.
“Russia is without doubt one of the largest crude producers with over 9 million barrels/day. Think about the chaos if this oil, amounting to about 10% of the worldwide oil provide of round 97 million, vanished from the market. It could have compelled the world to cut back its consumption, and for the reason that customers can be chasing the diminished provides, the costs would’ve spiralled to over $120-130,” the Minister stated on X.
Enormous impression seen
An impression on the present oil commerce between India and Russia wouldn’t solely jeopardise the previous’s power safety but additionally result in increased import invoice and probably increased present account deficit (CAD).
“I’m it. It’s an non-compulsory Invoice. It’s completely at my possibility. They go it completely at my possibility and terminate it completely at my possibility, and I’m it very strongly,” Trump instructed reporters throughout a Cupboard briefing on Tuesday.
Trump’s feedback got here at the same time as final week, Exterior Affairs Minister S Jaishankar stated shared India’s considerations with the US Senator Lindsey Graham over the Invoice — Sanctioning Russia Act of 2025.
“I feel our considerations and our pursuits in power safety have been made conversant to him,” the Minister stated in Washington DC on July 2, 2025.
Russia has emerged as India’s largest crude oil provider, accounting for greater than one-third of its oil provides. India procures crude oil from Russia on a spot foundation. The power commerce relationship between the 2 international locations has grown robust since 2022.
Up to now additionally, there had been stress on India to cease shopping for Russian crude. Nonetheless, the federal government clarified on a number of cases that “the nation’s power safety is vital” and India will purchase low-cost oil wherever it will get it.
Sanctioning Russia Act
In April 2025, US Senators Lindsey Graham (Republican-South Carolina) and Richard Blumenthal (Democrat-Connecticut) led 50 US Senators – evenly divided by social gathering affiliation – to introduce main and secondary sanctions in opposition to Russia and actors supporting Russia’s aggression in Ukraine.
These sanctions can be imposed if Russia refuses to have interaction in good religion negotiations for a long-lasting peace with Ukraine or initiates one other effort, together with army invasion, that undermines the sovereignty of Ukraine after peace is negotiated. The laws additionally imposes a 500 per cent tariff on imported items from international locations that purchase Russian oil, gasoline, uranium and different merchandise.
The Invoice, Sanctioning Russia Act of 2025, states: “To impose sanctions and different measures with respect to the Russian Federation if the Authorities of the Russian Federation refuses to barter a peace settlement with Ukraine, violates any such settlement, or initiates one other army invasion of Ukraine, and for different functions.”
Authorities sources stated that whereas nothing might be “conclusively” stated in regards to the progress in passing the stated Invoice, a disruption in Russian crude oil provides to India wouldn’t solely infuse extra volatility within the crude oil market but additionally result in increased costs, which in flip will stoke inflation, a state of affairs the US would wish to keep away from.
“Issues are fluid in the intervening time. The federal government shall be in a wait and watch over this. Nonetheless, any disruption within the already stretched and bruised oil markets may have antagonistic penalties for costs (oil) and international demand. It is not going to profit anybody,” stated one of many sources.
Revealed on July 10, 2025
