Can India Replace Russian Oil if Secondary Sanctions by President Trump?

In a bold, but horrifically bad idea, may move to pressure Russia into ending its war with Ukraine, President Donald Trump has threatened to impose 100% secondary tariffs on countries purchasing Russian oil and gas if no peace deal is reached within 50 days. This warning, delivered during discussions with NATO leaders, targets major importers such as China and India, which have increased their purchases of discounted Russian crude since Western sanctions were imposed in 2022. The tariffs would penalize buyers exceeding the G7’s $60 per barrel price cap, potentially disrupting global energy flows and forcing importers to seek alternatives.

India’s reliance on Russian oil—now accounting for about 40% of its seaborne crude imports—raises a critical question: Can India realistically replace these supplies without major economic fallout?

Since the onset of the Russia-Ukraine conflict, India has become one of Russia’s top oil buyers, benefiting from steep discounts that have saved the country billions in import costs. Russian crude now makes up roughly 35-40% of India’s total oil imports, up from just 2% pre-war.

This shift has been driven by economics: Russian oil is cheaper due to Western sanctions diverting flows away from Europe. However, Trump’s proposed secondary sanctions—tariffs on third-party nations dealing with Russia—could change this dynamic overnight.

Indian officials, including Petroleum and Natural Gas Minister Hardeep Singh Puri, have expressed confidence in the country’s ability to adapt. “India expanded the number of suppliers from 27 to 40. Currently, 35% of the oil comes from Russia, but India can quickly return to the previous scheme (2%),” Puri stated in comments to Reuters.

Alternatives include increased imports from traditional suppliers like Saudi Arabia, Iraq, and the UAE, as well as emerging sources such as the US, Guyana, and Brazil.

India’s largest state-owned refiner, Indian Oil Corporation, has already begun rebalancing its crude purchases in anticipation of tighter US sanctions.

Yet, experts warn that the replacement won’t be seamless. Russian oil’s discounts—often $10-20 per barrel below global benchmarks—have kept India’s energy costs low. Switching to pricier alternatives could drive up domestic fuel prices, exacerbating inflation and straining the economy.

A Bloomberg analysis estimates that enforcing such sanctions could disrupt 1.5-2 million barrels per day of Russian supply, pushing Brent crude prices to $90-100 per barrel by mid-2025.

For India, this means higher import bills and potential supply chain hiccups, though officials downplay long-term risks, citing sufficient global oil availability.

India has pushed back against Western pressure, emphasizing energy security as a top priority. The External Affairs Ministry cautioned against “double standards,” noting that Europe continues to import Russian gas and uranium despite its own sanctions.

NATO Secretary-General Mark Rutte echoed Trump’s threats, warning India, China, and Brazil of 100% secondary sanctions if they don’t curb Russian trade.

However, Indian leaders remain unfazed, with Minister Puri asserting there’s “no pressure” and ample options to ensure uninterrupted flows.

This stance reflects India’s strategic autonomy, balancing ties with Russia (a key defense supplier) and the US (a major trade partner). Past experiences, like halting Iranian oil imports in 2019 under Trump’s first-term sanctions, show India can pivot—but at a cost.

Ukraine’s presidential aide Andriy Yermak has urged such measures, arguing they could force China and India to push for peace to avoid a trade war.

If India reduces its Russian crude intake, refining output could drop, tightening supplies of diesel and gasoline. Europe, which banned direct Russian petroleum imports in February 2023, now relies heavily on Indian exports—accounting for up to 40% of its diesel needs pre-sanctions.

A shortfall could spike European fuel prices, contributing to inflation and higher transportation costs across industries like logistics and agriculture.

In the UK, similar bans have shifted reliance to non-Russian sources, but reduced Indian exports might force sourcing from farther afield (e.g., the US or Middle East), increasing shipping costs and emissions. Globally, this could lead to a “reshuffling” of trade flows, with Russia redirecting crude to other Asian buyers via shadow fleets, but enforcement challenges persist.

It would be a huge mistake to implement anything Lindsey Graham or Senator Bloomenthal recommends. They do not have the best interests of the United States at heart. And we need India as a trading partner in the new trading blocs that appear to be forming through President Trump’s trade negotiations.

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