U.S. President Donald Trump added further pressure to India on Wednesday by bumping up tariffs to 50% — but calls for India to immediately stop buying Russian oil could cause global crude prices to spike, industry sources told CNBC.
Trump has accused India of “fueling” Russia’s war machine and said the country is “directly or indirectly importing Russian Federation oil.” As a result, the U.S. imposed an additional 25% tariff on India, bringing total levies against the major U.S. trading partner to 50%.
India was once encouraged to buy Russian crude by the United States, and, unlike LNG, Russian crude isn’t sanctioned, but traded under a price cap to limit Moscow’s ability to profit from its sale. India is one of the biggest buyers of Russian oil, according to data from Kpler which shows total Russian crude exports amount to around 3.35 million barrels per day, of which India takes about 1.7 million and China 1.1 million.
In New Delhi, there must be “confusion,” Bob McNally, president of Rapidan Energy Group and former White House energy advisor to former President George W. Bush, told CNBC.
“Joe Biden went to India after the invasion of Ukraine and begged them to take Russian oil, the Indians hardly imported any Russian oil, and they begged India, ‘please take the oil,’ so that crude prices would remain low, and they did. Now we’re flipping around and saying, ‘why are you taking all this oil,’” McNally added.
