Trump’s Russia Sanctions Law: What It Means For India’s Oil Supply

US President Donald Trump has signed a bill imposing new sanctions on Russia into law, giving him expanded powers to target major buyers of Russian oil and gas.

The White House said, “On Friday, September 18, 2026, the President signed into law: H.R. 5334, the “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026,” which authorises and expands statutory sanctions, tariffs, and prohibitions on Russia and extends existing sanctions on Iran."

Notably, the Lindsey O. Graham Sanctioning Russia and Iran Act does not automatically impose tariffs on India. Instead, it gives Trump the authority to levy them on imports from the five largest purchasers of Russian crude and gas, with the list to be reassessed every 180 days. The tariff can be set at any rate up to the 100% ceiling, leaving the final decision with the US president.

India is currently among the countries that could fall within the law's scope because of its substantial purchases of Russian energy. New Delhi has maintained that its priority is securing energy for its 1.4 billion people, while also conveying to US interlocutors the possible implications for bilateral ties and global energy markets.

“The Indian side has also made clear its determination to take all necessary measures to protect its trade and economic interests. The government will work closely with Indian trade and industry bodies to deal with the implications of these developments, the External Affairs Ministry said in a statement earlier.”

The legislation's signing marks the latest step in a process that began in April 2025, when Senators Lindsey Graham and Richard Blumenthal introduced an earlier version of the sanctions bill. Its stated aim has been to put greater economic pressure on Moscow by targeting revenues from Russian energy exports and push Russia towards negotiations over the Ukraine war.

Why Russian Oil Matters To India

Russia remains India’s largest crude supplier despite a decline in purchases in August. India imported about 2.08 million barrels per day of Russian crude in August, accounting for roughly 45% of its total crude imports, according to Kpler data. That was down from about 2.82 million barrels per day in July, when Russia accounted for nearly 56% of India's crude basket.

The decline has been attributed to tighter Russian supplies, stronger Chinese competition for Russian crude and higher shipping risks. India has also increased purchases from alternative suppliers, including Venezuela.

Russian crude became particularly important for Indian refiners after Moscow offered substantial discounts following Western sanctions over the Ukraine war. Those discounts have narrowed as supplies have tightened.

India is the world's third-largest crude consumer and imports most of the oil it processes. Any abrupt reduction in Russian supplies could therefore increase the cost of securing alternative barrels.

Tariff Threat Comes As Oil Market Faces More Risks

The move comes at a particularly sensitive time for global energy markets.

India has already been diversifying its crude basket, buying oil from suppliers including Saudi Arabia, Nigeria, Venezuela and the US. But replacing Russian barrels entirely could involve higher freight and procurement costs, depending on the source and market conditions.

The threat also extends beyond India. China, the world's largest importer of crude, is another major buyer of Russian oil and could face the same tariff mechanism under the new law. Earlier, US Senator Richard Blumenthal issued a direct warning after the House vote, saying, “To China and India: you better clean up your act. Buy your oil and gas somewhere else.”

The law therefore creates a question for Washington as well as New Delhi: how aggressively will the Trump administration use the new tariff authority, and what impact would that have on global oil prices?

India has argued that its Russian oil purchases are driven by energy-security requirements. The government has also indicated that the potential impact of US measures on both bilateral relations and international energy markets has been raised with Washington.

For now, the immediate issue is not a 100% tariff already imposed on Indian goods, but whether and how Trump will use the authority granted by the new law. The outcome could determine how quickly Indian refiners further diversify away from Russian crude—and how much more that shift costs.

How Could Trump’s Tariffs Affect India?

The immediate impact on India would depend on whether the Trump administration actually uses the tariff authority against New Delhi and, if so, what rate it chooses. The law allows tariffs of up to 100 per cent on goods imported from countries that fall within its criteria as major buyers of Russian crude or natural gas. It does not automatically impose a 100 per cent tariff on Indian exports to the US.

For India, the issue extends beyond the cost of Russian crude. The US is one of India's largest export markets, meaning tariffs on Indian goods could affect sectors that depend heavily on access to American consumers. At the same time, moving rapidly away from Russian oil could force Indian refiners to source more crude from other suppliers, potentially increasing procurement and freight costs depending on global prices.

Indian officials have already warned Washington that measures targeting Russian oil could affect bilateral ties and global energy markets. New Delhi has maintained that securing affordable energy supplies remains a priority and has continued to diversify its sources of crude, according to Reuters.