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US Russia Oil Tariff Threat Puts India Ties Under Pressure
The United States has approved a bill that could let its president put very high tariffs on countries that buy Russian oil.
India buys a large amount of its oil from Russia because it has been an important and sometimes cheaper supplier.
India says it needs to keep its people supplied with energy and will protect its economy.
Indian officials have warned the United States that the plan could hurt relations between the two countries.
They also say it could make oil more expensive around the world.
Higher oil prices could be especially difficult for countries such as India that import most of their oil.
Some US lawmakers want countries to stop helping Russia earn money from energy sales.
It is still unclear whether Donald Trump will sign the bill and use the tariff power.
Reports also differ on whether the measure has already reached him after passing Congress.
The US House passed legislation allowing tariffs of up to 100% on countries buying Russian energy.
India said it remains committed to energy security and will protect its trade and economic interests.
Russia supplied more than one-third of India’s annual oil imports and about 45% of its crude purchases in August.
India warned that the US measure could harm bilateral relations and push up global energy prices.
The legislation’s final status and whether Donald Trump will impose tariffs remain uncertain, with reports differing on whether it has reached him.
- Who
- India, the United States, Russia, China, and US lawmakers are central to the dispute.
- What
- US legislation would allow tariffs of up to 100% on countries buying Russian energy, potentially targeting India and China.
- Where
- The dispute concerns US-India trade relations and global oil markets.
- When
- The US House passed the measure on Wednesday, and India issued its response on Thursday.
- Why
- The measure is intended to pressure Russia over the war in Ukraine, while India says Russian oil is important for its energy security.
India’s energy and economic concerns
US pressure on Russian oil buyers
Energy security versus sanctions
India’s energy and economic concerns
India says diversified energy supplies are necessary for its 1.4 billion people and that it must protect its trade and economic interests.
US pressure on Russian oil buyers
US lawmakers support using tariffs to pressure countries buying Russian energy and to increase pressure on Russia over the Ukraine war.
Impact on bilateral relations
India’s energy and economic concerns
India warns that the measure could damage US-India ties and describes the pressure as impractical given its economic needs, according to the cited US policy expert.
US pressure on Russian oil buyers
Supporters of the measure argue that targeting major Russian oil buyers could reduce Russia’s energy revenue, though imposing tariffs on China could also risk a wider trade conflict.
Effect on global oil prices
India’s energy and economic concerns
India says restricting Russian oil purchases could raise global prices and increase inflationary pressure for energy-importing developing countries.
US pressure on Russian oil buyers
The proposed tariffs are intended to change purchasing behavior, even though the articles report concerns that removing Russian oil from major markets could sharply increase prices.
Key facts
- Potential tariff
- Up to 100% on countries buying Russian energy
- India’s oil imports
- About 90% of India’s oil requirements are imported
- Russian share
- Russia supplied more than one-third of India’s annual oil purchases; its share was reported at 45% in August
- India’s August purchases
- More than 1.9 million barrels per day from Russia
- India’s oil consumption
- About 5 million barrels per day
- Reported Brent price
- Around $105 per barrel, after recently reaching approximately $108
- Import-cost impact
- Bank of Baroda estimates each sustained $1 increase in crude prices could raise India’s annual import bill by about ₹18,000 crore
Quotes
Ministry of External Affairs
India’s foreign ministry, which issued the statement on the US legislation.
“This issue has been discussed at high levels in recent months with various US interlocutors. Its potential implications for not just the bilateral relationship but also the international energy market have been very clearly articulated by the Indian side.”
livemint.com
“India has noted the passage of the Sanctioning Russia and Iran Act in the US Congress and that it’s monitoring further developments on this matter.”
livemint.com
Richard Blumenthal
US senator who warned India and China after the bill passed the House
“To China and India: You better clean up your act. Buy your oil and gas somewhere else.”
telegraphindia.com
Sources
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