US Tariffs Fail to Deter India's Russian Oil Imports; Trump Considers 500% Levy
US President Donald Trump's escalating tariffs, including a current 50% and a proposed 500% levy, have failed to deter India from purchasing Russian crude oil. Despite intense pressure, India's imports are expected to remain strong, with Kpler forecasting 1.3 million barrels/day in January. Indian Oil Corporation and Nayara Energy have increased their Russian oil purchases, while Reliance abstained. Experts suggest extreme tariffs would alter supply methods, not necessarily create an overnight shortage, as India utilizes various intermediaries.
US President Donald Trump is intensifying economic pressure on India to halt its purchases of Russian crude oil, implementing a 50% tariff on India, with 25% specifically targeting Russian imports. Furthermore, reports indicate Trump is contemplating a significant escalation to a 500% tariff. However, experts broadly anticipate that India will continue its acquisition of Russian oil despite these escalating financial deterrents.According to Kpler, a global data and analytics firm, India's imports of Russian crude are projected to remain substantial in January, possibly reaching around 1.3 million barrels per day. This resilience is underscored by increased purchases from entities like the government-owned Indian Oil Corporation and Rosneft-linked Nayara Energy, although Reliance Industries notably abstained this month.Sumit Ritolia, Kpler’s Lead Research Analyst, explains that a proposed 500% US tariff would drastically alter the mechanics of oil purchasing and risk perception, rather than immediately causing an oil shortage. India currently sources Russian crude through various intermediaries and traders, circumventing direct sanctions. Companies such as Tatneft, Redwood Global Supply, Rusexport, Morexport, and Algaf Marine have stepped in to fill the void left by reduced direct transactions with sanctioned entities like Rosneft and Lukoil, illustrating India's adaptability in navigating geopolitical challenges for its energy needs.
