Trump Targets India: Why Crude Oil Trade Faces Scrutiny Despite No Sanctions – Key Insights

India recognised as a “friend" by the US President Donald Trump on several occassions faced an additional 25 per cent US tariff on Wednesday, increasing the total levy imposed on the south Asian nation to 50 per cent for its continued purchase of Russian oil.

However, if India halts its oil dealings with Kremlin it is expected to create a spike in global crude oil prices.

India was once encouraged to buy Russian crude by the United States and unlike LNG, Russian crude isn’t sanctioned but traded under a price cap to limit Moscow’s ability to profit from its sale.

Currently, India is one of the largest buyers of Russian oil, according to data from Kpler. This indicates that Russian crude exports amount to around 3.35 million barrels per day.

Also Read: How Do Trump's Tariffs on India Compare With Other Nations?

India takes about 1.7 million and China 1.1 million, however, the tariff levied on the latter is 30 per cent.

If India significantly reduces its Russian oil imports, refineries would try to find alternative barrels from the Middle East, which would suggest relying on the oil barrels like during pre-2022, as per media reports.

As per the U.S. Energy Information Administration, Russia is the third largest global crude producer after the U.S. and Saudi Arabia. Kremlin produces close to 11 million barrels of oil per day, it said.

India’s Russian crude oil imports was reportedly 38 per cent in 2023 and 2024 and is 36 per cent in 2025.

If this supply was to be removed from the market, prices would skyrocket, according to industry sources.

To this effect, the Minister of Petroleum and Natural Gas, Hardeep Singh Puri, last month told a media outlet that the prices of oil would surge upto USD 130 per barrel.

Further, he mentioned that the US shared this view, and had requested India to purchase Russian oil, however, within the price cap.

Russian crude oil was under a price cap set by the European Union ever since the former invaded Ukraine in 2022. The price cap was set at USD 60 per barrel, lower than the usual price range for this commodity.