{"id":50420,"date":"2025-08-06T21:23:08","date_gmt":"2025-08-06T21:23:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/50420\/"},"modified":"2025-08-06T21:23:08","modified_gmt":"2025-08-06T21:23:08","slug":"what-if-india-and-china-stop-buying-russian-oil-dw-08-06-2025","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/50420\/","title":{"rendered":"What if India and China stop buying Russian oil? \u2013 DW \u2013 08\/06\/2025"},"content":{"rendered":"

India<\/a> and China<\/a> have pushed back\u00a0against US President Donald Trump’s<\/a> threats of secondary\u00a0sanctions\u00a0\u2014 penalties for doing business with a sanctioned country \u2014 over their continued purchases of Russia’s<\/a>\u00a0oil, which is a\u00a0key revenue stream for Moscow’s war in Ukraine<\/a>.\u00a0<\/p>\n

Both nations vowed to protect their energy security and economic sovereignty\u00a0against what Beijing firmly called “coercion and pressure” from the United States<\/a>. China became\u00a0the biggest importer of Russian oil in 2022.<\/p>\n

India, meanwhile,\u00a0accused the\u00a0West of hypocrisy, pointing out that the European Union<\/a>\u00a0continues\u00a0to import Russian energy, despite having massively reduced its\u00a0reliance on it since the war began.<\/p>\n

New Delhi further noted that Washington had actively supported its oil purchases from Russia, which ramped up shortly after the Russian invasion, to help stabilize global oil prices.<\/p>\n

India’s oil purchases from Russia grew\u00a0nearly 19-fold from 2021\u00a0to 2024, from 0.1\u00a0to 1.9 million barrels a day, while China’s rose by 50%\u00a0to 2.4 million barrels a day.<\/p>\n

Petras Katinas, a Lithuania-based energy analyst at the Centre for Research on Energy and Clean Air (CREA), told DW that India, Russia’s second-largest oil buyer,\u00a0had saved up to $33 billion in energy costs between 2022 and 2024 as Moscow\u00a0offered large price cuts<\/a> when\u00a0the US and Europe cut their reliance<\/a> on Russian oil and gas.<\/p>\n

India’s longtime policy of balancing ties with the US, Russia and China, without prioritizing any side, had “underpinned” the\u00a0decision to buy discounted Russian crude, with New Delhi “prioritizing energy security and affordability,” Katinas said.<\/p>\n

Trump’s new sanctions threat roils markets<\/p>\n

Having already imposed a\u00a025% tariff on Indian imports<\/a>, Trump issued an executive order on Wednesday, levying\u00a0an additional 25% tariff on the same goods\u00a0over India’s\u00a0purchases of Russian oil.\u00a0<\/p>\n

Oil prices rose nearly 1% on the news, while Indian\u00a0media outlets reported that the new levy could spike the country’s oil bill by up to $11 billion. New Delhi labeled the additional levy “unfair, unjustified and unreasonable.”<\/p>\n

Trump said the tariffs would take effect in\u00a021 days, giving\u00a0India and Russia time to\u00a0negotiate with the administration on the import taxes. The president was\u00a0also expected to announce wider secondary sanctions on other countries and entities with which\u00a0Russia trades oil. The White House said that details would\u00a0come on Friday, without giving further details.<\/p>\n

Secondary sanctions would be another major blow for the Russian economy, already reeling from\u00a0Western sanctions. With military\u00a0spending now exceeding 6% of GDP and real inflation estimated by some analysts at 15-20% versus the official 9% figure,\u00a0Russia is burning through cash, putting serious pressure on its budget and arms factories.<\/p>\n

For global markets, new sanctions\u00a0could trigger a seismic shock in energy prices and trade flows reminiscent of 2022, when the oil price surged and Russia bypassed Western sanctions by striking discounted energy deals with two of the world’s largest economies.<\/p>\n

“If India had not bought Russian crude [in 2022], it’s anyone’s guess what the oil price would have been \u2014 $100 (\u20ac86), $120, $300 [per barrel],”\u00a0Sumit Ritolia, a New Delhi-based oil analyst from trade research house\u00a0Kpler, told DW. WTI crude hovered between $85\u00a0and $92\u00a0per barrel in the weeks before the invasion.<\/p>\n

Trump’s 25%\u00a0“secondary\u00a0tariff” could now leave India with no choice but to scale back at least some of its oil trade with Russia. \u00a0Any additional sanctions would only make matters worse.<\/p>\n

Katinas said secondary sanctions “raise\u00a0the stakes” significantly, “threatening Indian companies’\u00a0access to the US\u00a0financial system and exposing banks, refineries, and shipping firms to serious repercussions given their integration into global markets.”<\/p>\n

\"AIndian refiners process Russian crude into diesel and jet fuel, much of which is then exported to Europe and Asia for profitImage: Biju Boro\/AFP<\/p>\n

Oil price spike to stoke inflation<\/p>\n

If Russia’s five\u00a0million barrels a day were suddenly removed from the oil market, analysts think oil prices could surge once again, as affected countries scramble to source other supplies.\u00a0Even with\u00a0oil cartel\u00a0OPEC<\/a> recently increasing output, replacing such a large volume would\u00a0be exceptionally difficult in the short term, given limited spare capacity and logistical constraints.<\/p>\n

“There is nowhere to get those five\u00a0million [barrels] fast enough to prevent a spike in oil prices.”\u00a0Alexander Kolyandr, senior fellow at the Center for European Policy Analysis, told the UK’s Independent newspaper.<\/p>\n

Ritolia told DW it may take Indian firms up to a year to cut their reliance on Russian oil, if required.<\/p>\n

Higher oil prices would trigger\u00a0a sharp rise in inflation both in the US\u00a0and worldwide. The US Federal Reserve<\/a>\u00a0has estimated that every $10 increase in crude adds about 0.2 percentage points to US\u00a0inflation. India\u2019s central bank reached a similar conclusion.\u00a0<\/p>\n

If prices were to climb from the current $66 a barrel to $110-$120\u00a0per barrel, a\u00a0roughly one\u00a0percentage point inflation rise would\u00a0drive up costs for consumers and businesses \u2014 especially in energy, transport, and food.<\/p>\n

China spared while India suffers?<\/p>\n

Katinas said China, whose total trade with the US is more than four times the size of India’s, “might be exempt” from the new US measures.\u00a0With the world’s two largest economies conducting over $580 billion of trade,\u00a0China’s sheer economic scale gives it bargaining power that India lacks.<\/p>\n

China’s chokehold on the supply of rare earth minerals\u00a0\u2014 a persistent friction point in US-China relations \u2014 may serve as yet another lever Beijing is pulling to temper Trump’s stance.<\/p>\n

With India lacking comparable leverage,\u00a0Trump earlier this week\u00a0doubled down on New Delhi, saying the likely impact of his new sanctions on Russia and India would “take their dead economies down together.”<\/p>\n

\"AIndia\u2019s economy gained billions in savings from discounted Russian oil importsImage: Arun Sankar\/AFP<\/p>\n

India’s oil jackpot shrinks<\/p>\n

India\u00a0is, meanwhile, no longer reaping the same windfall from Russian oil as it did in 2022, when discounts ranged from $15 to $20 per barrel. That margin has now narrowed to around $5, according to Kpler\u2019s Ritolia.<\/p>\n

Eager to replenish its war chest, Russia is aggressively maximizing energy revenues, buoyed by rising demand from Turkey<\/a> \u2014 now its third-largest oil customer \u2014 and across Asia, where Russian crude is discreetly reexported under alternative labels to sidestep US\u00a0sanctions.<\/p>\n

Still, Indian refiners continue to buy. Imports hit an 11-month high in June at 2.08 million barrels per day, accounting for 44% of India\u2019s total crude intake \u2014 a sharp rebound driven by geopolitical hedging and price competitiveness.<\/p>\n

Beyond the rhetoric, China’s likely response\u00a0seems guided by its earlier reaction to secondary sanctions.\u00a0Chinese banks are increasingly refusing\u00a0Russian transactions, even in yuan, forcing\u00a0Moscow to rely on opaque intermediaries<\/a> and third-country workarounds.<\/p>\n

Beijing sees oil imports as a priority that is\u00a0mostly shielded from political pressure, while India is seen as more likely to hedge: trimming purchases if pressured, but not abandoning discounted Russian crude entirely.<\/p>\n

Ritolia speculated that India might “reduce” its Russian oil imports, but added: “I don’t see us going down to zero anytime soon.”<\/p>\n

Edited by: Ashutosh Pandey<\/p>\n","protected":false},"excerpt":{"rendered":"India and China have pushed back\u00a0against US President Donald Trump’s threats of secondary\u00a0sanctions\u00a0\u2014 penalties for doing business with…\n","protected":false},"author":2,"featured_media":50421,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[43,44,41,39,42,40],"class_list":["post-50420","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-headlines","tag-news","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/50420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=50420"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/50420\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/50421"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=50420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=50420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=50420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}