Key Takeaways
India has purchased about 1.75 million barrels of Russian oil per day from January to June of this year as Russian oil prices are lower than the international benchmark due to an oil price cap set by the West.
President Trump is threatening to impose new sanctions on Russia as well as on countries that buy its energy exports unless President Putin takes steps to end its war with Ukraine.
Trump upped India’s tariffs from 25% to 50%.
Russian oil and gas revenues have been dropping since April and are expected to account for 3.7% of GDP, down from 5.1% of GDP.
According to President Trump, “India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine.” India does export refined petroleum products, including diesel and jet fuel, some of which are processed from Russian oil. Trump said he will impose new sanctions on Russia as well as on countries that buy its energy exports unless President Putin takes steps to end its three-and-a-half-year war with Ukraine. India says it intends to keep purchasing oil from Russia. In July, Trump announced 25% tariffs on Indian imports that went into effect on August 1, and then upped them to 50%. There are a range of geopolitical issues, including this one, deterring a U.S.-India trade deal. India, for example, has been irritated by Trump taking credit for an India-Pakistan ceasefire that halted hostilities between the two countries.
India is the biggest buyer of seaborne oil from Russia, importing about 1.75 million barrels per day from January to June this year — 1% higher than a year ago. According to Indian officials, the global market situation is forcing it to buy oil from Russia as traditional supplies were diverted to Europe after the outbreak of the Russian invasion of Ukraine.
India’s main refiners, however, recently paused buying Russian oil, and lessened discounts to other suppliers after Trump threatened substantial tariffs on countries that make such purchases. In May 2025, India’s imports from Russia declined by 9.8%, $9.2 billion, compared to imports in May 2024. Indian Oil Corp, the country’s largest refiner, recently bought seven million barrels of oil from the United States, Canada, and the Middle East. According to a former Indian trade official, India’s oil refineries — both public and private — determine where to buy oil based on factors such as price, supply security, and export rules, operating independently of the government.
India is not the only country purchasing oil from Russia. China is also purchasing Russian oil and is its largest buyer. In 2024, China imported $62.6 billion worth of Russian oil, compared to India’s $52.7 billion. In April, Chinese imports of Russian oil rose 20% over the previous month to more than 1.3 million barrels per day.
The EU’s decision to boycott most Russian seaborne oil from January 2023 led to a massive shift in oil trade from Europe to Asia. China has been the number one overall purchaser of Russian energy since the EU boycott, with about $219.5 billion worth of Russian oil, gas, and coal purchases, followed by India with $133.4 billion and Turkey with $90.3 billion. Before the invasion, India imported relatively little Russian oil, as the above chart shows.
Senator Lindsey Graham is pushing for sanctions and tariffs on Russia and its financial backers. In April, he introduced a bill that would authorize the president to impose tariffs as high as 500% not only on Russia but on any country that “knowingly” buys oil, uranium, natural gas, petroleum products, or petrochemical products from Russia. The bill has 84 co-sponsors in the Senate and a corresponding House version has been introduced with bipartisan support.
Russia’s Oil Revenues
Russia continues to earn substantial sums from oil revenues, despite the oil price cap imposed by the Group of Seven leading industrialized nations. These nations enforce the cap by requiring shipping and insurance companies to refuse to handle oil shipments above the cap. Russia has been able to evade the cap by shipping oil on a “shadow fleet” of old vessels, using insurers and trading companies located in countries that are not enforcing sanctions.
Russia’s revenues from oil exports dropped to $13.2 billion in April, the lowest level since June 2023 due to lower oil prices. The price of Russian grades fell alongside the benchmark international prices, which lost about $10 per barrel. Russia’s oil prices averaged $55.64 per barrel in April with all major export grades below the $60 a barrel price cap set by the West for Russian oil trade, according to IEA’s estimates. According to the Russian finance ministry, Russia’s budget revenues from oil and gas dropped by 12% in April from a year earlier. Revenues dipped to $13.57 billion in April, from $15.3 billion in the same month of last year.
For the first four months of the year, oil and gas revenues fell by 10.3% to $46 billion, according to the ministry’s data. Russia said it expects 24% lower revenues from oil and gas this year compared to earlier estimates, following the oil price drop in early April. The drop lowered the price of Russia’s Urals crude oil close to $50 per barrel. Oil and gas income is now expected to account for 3.7% of GDP, down from the expected 5.1% of GDP before April. As a result of lower oil prices, Russia’s finance ministry has also tripled the estimate of its budget deficit to 1.7% of GDP for 2025, up from a previously expected deficit of 0.5% of GDP.
Russia’s oil sales dropped further in June, bringing in $12.6 billion and they continued to fall in July. Russian oil exporters are predicted to take in $153 billion this year, with fossil fuels being the single largest source of budget revenue. Russia’s energy exports support Russia’s ruble currency and help Russia to buy goods from other countries, including weapons and parts.
Analysis
After years of primary sanctions against Russian products, President Trump is attempting to apply a secondary sanction of 25% on India as punishment for buying Russian oil. This move has bipartisan congressional support, increasing the likelihood of escalating sanctions against India and other countries that continue to purchase Russian oil and diminishing the chances of a trade deal being reached anytime soon.
Because the U.S. is India’s largest trading partner, sanctions could force Indian refineries to shift their purchases away from Russian crude if they remain in effect for a long enough time period. That shift could raise the price of oil significantly.
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