The threat of US tariffs on major buyers of Russian oil could squeeze an increasingly important source of crude for India and China as Gulf supply disruption tightens the global market.
The US House of Representatives has granted President Donald Trump authority to impose tariffs on any of the five largest buyers of Russian crude or gas that “knowingly” book a new cargo, with rates of up to 100 per cent. The House passed the Lindsey O Graham Sanctioning Russia and Iran Act 262-159 on Wednesday, and a White House official said Mr Trump intends to sign it.
The tariffs could take effect 30 days after enactment.
The threat itself could prompt buyers to move faster. “Paradoxically, it could incentivise more purchases from Russia to get ahead of any future risks,” said Rachel Ziemba of Ziemba Insights. “Risks front-loading, buying more now.”
That could further entrench Russia’s role as a key alternative to Gulf supply for Asian buyers. “Russian crude has effectively become an important supply line and an important hedge against Middle Eastern supply disruption,” said Sumit Ritolia, lead analyst at Kpler. “Replacing Russian crude at current volumes would be challenging or impossible.”
late Republican Senator from South Carolina
'Blood money'
Mr Graham, who died in July, spent more than a year arguing for that leverage in increasingly forceful terms. “If you keep buying cheap Russian oil to allow this war to continue, we're going to tear the hell out of you, and we're going to crush your economy, because what you're doing is blood money,” he said in a Fox News interview in July 2025, naming China, India and Brazil.
As Mr Trump’s additional 25 per cent duty on Indian goods took effect that August, Mr Graham wrote: “India is experiencing the cost of supporting [Russian President Vladimir] Putin.” His original bill carried a 500 per cent rate and remained stalled for 15 months.
Impact on India
Kpler data shows Russia's total exports were 6.79 million barrels per day in August, down from a peak of 8 million bpd in May. Russian crude accounted for 18.7 per cent of India’s imports in February, on par with Saudi Arabia and Iraq. By July, its share had reached nearly 50 per cent, or 2.96 million bpd, as India’s Middle East imports fell 63 per cent to 1.26 million bpd.
The US bought $58.9 billion of Indian goods in the first seven months of this year and sold India $30.4 billion worth, US Census Bureau data shows, leaving a $28.4 billion deficit. That was less than a third of the $91.2 billion gap with China over the same period.
A tariff aimed at Russian oil could also hit Indian exports with little connection to the trade it is trying to punish. Electrical machinery, including smartphones and electronic components assembled for American brands such as Apple, was India’s largest export category to the US in the first half of 2026.
China’s Russian crude imports have fallen 15 per cent since February to 1.89 million bpd, but their share of the country’s imports has risen to 22 per cent from 16 per cent as Gulf supplies declined. China also receives about 800,000 bpd of Russian crude by pipeline, under long-term contracts that would not be affected by tariffs on seaborne shipments.
The broader oil market is already tight, with Brent above $100 for seven straight sessions. The 10-day average for traffic through the Strait of Hormuz was 14 crossings on Friday, compared with nearly 100 before the war, while Saudi Arabia’s East West Pipeline was damaged in a drone strike last week and its alternative route through Bab Al Mandeb strait remains restricted by Houthi attacks.
New Delhi’s response on September 17 was firmer than its answers to Mr Graham’s earlier threats. The Ministry of External Affairs said India “remains firmly committed to ensuring energy security for its 1.4 billion people” and would take “all necessary measures to protect its trade and economic interests”.
Washington’s position has been more ambiguous. At the start of the Iran war, the administration briefly allowed India to lift Iranian crude for the first time in seven years to help keep oil flowing and prices down.
“The White House is likely to be cautious about imposing tariffs in the near term because doing so would tighten supplies further, push oil prices higher and place additional pressure on the global economy,” said Neil Quilliam, associate fellow at Chatham House.
“The high price at the pump in the US has already hit Trump’s popularity rating.”
China trade-off
China could also escape immediate tariffs. Bloomberg reported this week that planned duties will be held back until Mr Trump meets President Xi Jinping. Even tariffs of 20 per cent to 30 per cent “would end the truce, risk critical mineral shortages and additional export controls”, Ms Ziemba said.
Refiners are likely to seek ways around the measure rather than simply stop buying Russian crude. “China and India are the key pressure points as refiners will seek exemptions, reduce spot purchases and demand wider Russian discounts rather than stop buying altogether,” said Janiv Shah, vice president for oil at Rystad Energy.
The US tariffs could be “mildly bullish for oil prices as available volume theoretically tightens”.
