How Moscow might respond if Trump stops Russian oil to India
MOSCOW (Reuters) -U.S. President Donald Trump‘s demand on India to halt Russian oil imports could threaten billions in Russian revenues, prompt Moscow to retaliate by stopping a major U.S.-led oil pipeline and potentially lead to a new global supply crisis.
India, the world’s third largest oil importer, has become the biggest buyer of Russian oil since 2022, purchasing up to 2 million barrels per day of oil accounting for 2% of global supply. Other top buyers are China and Turkey.
The Indian route is so important for the Kremlin that if disrupted it could prompt it to retaliate by closing the CPC pipeline from Kazakhstan, where U.S. oil majors Chevron and Exxon hold big stakes, analysts at JP Morgan said this week.
“Russia is not without leverage,” the U.S. bank said.
Trump has threatened to slap tariffs of up to 100% on countries that buy Russian oil unless Moscow reaches a peace deal with Ukraine by August 7-9. A 25% tariff on all U.S. goods imports from India starts on Friday.
Reuters reported on Thursday that Indian state refineries had paused purchases of Russian oil this week amid Trump’s threats.
REALIGNMENT
India only began buying large quantities of oil from Russia, the world’s second largest oil exporter, since 2022. It became a top importer after Europe, Russia’s former top client, imposed a ban on Russian oil over its military actions in Ukraine. Russia’s oil giant Rosneft has a major stake in one of India’s biggest oil refineries.
India is now 35% reliant on Russian oil imports worth $50.2 billion in the 2024-25 fiscal year, according to India’s government data.
“Cutting off this flow would require a massive realignment of trade flows,” said Aldo Spanjer from BNP Paribas, adding that the global supply was already stretched.
India buys all varieties and grades of Russian oil – including Urals from Western ports, ESPO and Sokol from the Pacific and some grades from the Arctic, according to LSEG data.
Urals would be hit hardest if India stops buying as it purchases up to 70% of Russia’s biggest export grade by volume. India’s oil minister said the country can find alternative supply.
India would need to raise imports of U.S. and Middle Eastern crude or cut refining runs, leading to a spike in diesel prices, especially in Europe, which imports fuel from India.
“Indian refiners will still struggle to replace the heavy quality of Russian crude so they may end up paring runs,” said Neil Crosby from Sparta Commodities.
FALLING INCOME
Russia has managed to continue selling oil since 2022 despite international sanctions, although it sells it at discounts to global prices.