DM Monitoring
The United States has accused India of capitalizing on discounted Russian oil imports during the ongoing Ukraine war, labeling the practice as arbitrage. Treasury Secretary Scott Bessent criticized India for purchasing cheap Russian crude, refining it, and reselling it globally, allegedly generating significant profits.
According to a CNBC report, Bessent stated on “Squawk Box” that India’s actions amount to profiteering, with some of the country’s wealthiest families earning an estimated $16 billion in excess profits. India has become Russia’s top oil buyer since the 2022 invasion of Ukraine, importing 1.5 million barrels per day (bpd) in July, surpassing China, which imported about 1 million bpd, per Kpler data.
The U.S. claims India refines Russian oil into products like gasoline and diesel, which are then sold to regions, including Europe, that have imposed sanctions on Moscow. This follows a sharp increase in India’s Russian oil imports, which were negligible before the conflict.
In response, President Donald Trump announced a 25% tariff on Indian exports to the U.S., effective next week, to penalize New Delhi for its Russian oil purchases. These “secondary tariffs” aim to pressure Russia into negotiating a settlement with Ukraine.
Bob McNally, president of Rapidan Energy and former advisor to President George W. Bush, told CNBC that India’s increased Russian oil imports were initially encouraged by the U.S. The Biden administration had urged India to buy Russian crude to stabilize global oil prices after Western bans risked causing a price surge, which could have driven up U.S. gasoline costs. McNally noted that India’s role was integral to a U.S.-European price cap mechanism designed to limit Moscow’s oil revenue while maintaining global supply.
