US Secondary Tariff Threat May Impact India's Russian Oil Imports

President Donald Trump announced a 100% tariff on Russian exports, including oil, and an equivalent secondary tariff on countries importing Russian shipments. This move is set to be imposed after a 50-day deadline for Moscow to end the war with Ukraine.

The US threat to impose penal tariffs on countries purchasing Russian oil could significantly affect India's current energy procurement strategy. The discounts India enjoys on Russian oil may be outweighed by the potential costs to its merchandise exports to America, especially as both nations are in discussions over a trade deal.

Market and Government Reactions

The oil market reacted calmly to Trump's announcement, with benchmark Brent crude remaining below $70/barrel. Indian Oil Minister Hardeep Singh Puri commented on the availability of global energy supplies, indicating that alternative sources could be arranged if necessary.

Industry experts suggest that Indian refiners might increase their purchases of cheap Russian oil during the deadline period, while also securing alternative supplies from West Asia and new players like Brazil, albeit at a higher cost.