Also Read| Trump switches from tariffs to sanctions, bars Russia’s two biggest oil companies
A pivot from tariffs to sanctions
According to the US Treasury Department, the latest sanctions are designed to cut Moscow’s profits from oil exports without halting its supplies altogether, a shift from the earlier G7 price-cap mechanism that allowed Russian crude to flow below $60 a barrel. As CNBC reported, energy experts expect the new restrictions to tighten global oil supply chains. John Kilduff of Again Capital noted that while OPEC, particularly Saudi Arabia, has some spare capacity, “the increased demand for the global non-sanctioned supply will raise prices.”
This new phase in Trump’s energy diplomacy underscores his growing frustration with Russian President Vladimir Putin and his desire to pressure Moscow into agreeing to a ceasefire in Ukraine. Yet, by sanctioning two of Russia’s largest oil producers, Trump has also opened a new front in his trade standoff with India, one of Russia’s biggest oil buyers.
India in the crossfire
For India, the sanctions have come at a sensitive moment. The country has become one of the top destinations for discounted Russian crude since the start of the Ukraine war in 2022. But with Washington now targeting Rosneft and Lukoil, Indian refiners are being forced to reassess their procurement strategies. Reuters reported that privately-owned Reliance Industries, which runs the world’s largest refinery in Jamnagar, Gujarat, plans to cut or even halt imports of Russian oil. Reliance has long-term contracts to buy about 500,000 barrels per day from Rosneft, but the new sanctions are expected to complicate those shipments.Nayara Energy, whose largest shareholder is Rosneft, faces a similar dilemma. Reuters also noted that Indian state refiners, including Indian Oil Corporation and Bharat Petroleum, are scrutinising cargo documentation for deliveries after November 21 to ensure that the oil is not sourced directly from sanctioned Russian entities.Also Read| India said to be readying for massive cuts in oil imports from Russia, its biggest supplier
The sanctions thus place India in a delicate position between the need to maintain affordable energy access and the imperative to protect its trade relationship with the US just as it is negotiating a trade deal with the US to fend off 50% tariffs imposed by Trump.
Trump’s energy sanctions are not unfolding in isolation. They are deeply intertwined with his tariff strategy toward India. He has already imposed a 50% tariff on Indian goods, citing New Delhi’s continued purchase of Russian oil as justification. He has been repeatedly claiming that Prime Minister Narendra Modi personally assured him that India would gradually stop buying Russian crude, a statement India has firmly denied.
“India, as you know, has told me they are going to stop…it’s a process. By the end of the year, they’ll be down to almost nothing,” Trump said. India’s official response was unequivocal that no such conversation occurred, and the government remains focused on protecting consumer interests rather than capitulating to foreign pressure.
Bloomberg reported that India and the U.S. have been negotiating a trade deal to reduce tariffs on Indian exports to about 15–16%, but progress has been slow due to energy-related disagreements. Trump’s repeated claims about Modi’s promises may be aimed less at reflecting reality and more at shaping global perception that India is bending to U.S. pressure and distancing itself from Russia.
Energy diplomacy and the balancing act
India’s challenge is to sustain its delicate diplomatic equilibrium. As Ashok Malik of The Asia Group told Bloomberg, “India needs the trade deal with the U.S. and it needs energy access at reasonable prices. Economic statecraft would require Indian diplomacy to achieve both.” To that end, New Delhi has begun exploring increased imports of U.S. liquefied petroleum gas and crude, with officials suggesting potential purchases of up to $15 billion.
This shift does not mean a clean break from Russia, but rather a recalibration aimed at minimizing exposure to sanctions risk while maintaining diversified energy supplies. Yet, the U.S. tariffs and sanctions together amplify India’s dilemma. Every move to safeguard its energy security risks aggravating Washington, while aligning too closely with the U.S. could erode its long-standing partnership with Moscow.
Adding to the intrigue, Prime Minister Modi announced that he would attend the 47th ASEAN Summit in Kuala Lumpur virtually, avoiding a possible meeting with Trump. Analysts interpret this as a subtle diplomatic signal to de-escalate tensions while keeping dialogue channels open.
Trump’s sanctions have already rattled markets and intensified debates over India’s foreign policy autonomy. With India’s energy and trade policies under scrutiny, Modi’s decision to skip an in-person meeting suggests caution. India wants to avoid the perception of being cornered or publicly coerced by Trump.
For India, Trump’s oil moves come at a time when its economy is expanding and its energy demand is soaring. Reducing Russian imports without a cost-effective alternative could raise domestic fuel prices, affecting consumers and industries alike.
India stands between two competing needs to secure a trade deal with Washington while preserving its strategic autonomy and energy affordability. As Trump shifts the oil chessboard, India’s diplomacy will be tested like never before. The oil game Trump is playing is aimed at, besdies forcing Russia into a ceasefire, shaping a global order where big countries do not join hands to challenge American supremacy. Trump’s repeated claims about Modi’s promise to him that India will stop buying Russian oil could be aimed at creating a global impression that India, at least in bilateral talks between the two leaders, is agreeing to shift away from Russia.