Indian oil refiners have started looking for alternative supplies of crude after President Trump threatened secondary sanctions on Russian energy exports if Moscow refuses to sign a ceasefire deal for the Ukraine.
Bloomberg reported that companies such as Bharat Petroleum Corp. and Hindustan Petroleum Corp. were looking for oil cargoes from the Middle East, the North Sea, and the Mediterranean for May delivery in anticipation of tariff action.
India has emerged as one of the biggest buyers of Russian crude since the start of the war in Ukraine, with grades including Urals accounting for almost 40% of the nation’s imports last year. Refiners have enjoyed elevated profits due to the cheaper supplies, although that advantage has waned in recent months. China has also purchased bigger volumes since the invasion.
President Trump threatened a 25% tariff on all Russian oil, saying “If Russia and I are unable to make a deal on stopping the bloodshed in Ukraine, and if I think it was Russia’s fault — which it might not be — but if I think it was Russia’s fault, I am going to put secondary tariffs on oil, on all oil coming out of Russia,” in an interview for NBC.
“That would be that if you buy oil from Russia, you can’t do business in the United States. There will be a 25% tariff on all oil, a 25- to 50-point tariff on all oil,” Trump elaborated.
The mechanism would be the same as the one Trump applied to Venezuela, slapping a 25% tariff on all imports from countries that continue buying crude from the South American nation.
Since the US is India’s top trading partner, under a scenario of “secondary tariffs” for buyers of Russian oil, it’s likely that the South Asian nation would look for alternative supplies, said Warren Patterson, the head of commodities strategy for ING Groep NV in Singapore.
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