US targets India, China with 500% tariff on Russian Oil imports

During a press conference in Ukraine's capital Kiev, Senator Richard Blumenthal advocated a bold economic strategy against Russia, saying that countries buying oil, gasoline or petrochemicals from Russia should be subject to a 500% tariff. The proposal is seen as a major step towards weakening Russia's economic power and financially impacting the Ukraine war. Blumenthal explained that the goal of this move is to limit the Kremlin's war funds, which play a key role in continuing Russia's attack on Ukraine.

Special focus on India and China

The biggest impact of this proposal can be on countries like India and China, which import large amounts of crude oil from Russia. India, which imports about 85% of its oil needs, has significantly increased the amount of oil it buys from Russia at cheaper prices since the Ukraine war began. As of 2023, India was importing about 1.62 million barrels of crude oil per day from Russia, which is 35% of its total oil imports. Similarly, China has also been a leader in purchasing oil and gas from Russia. Senator Blumenthal's proposal is believed to be part of a strategy to increase economic pressure on these two countries.

Purpose and potential impact of the proposal

The proposed bill calls for imposing a 500% tariff on all countries that continue to purchase oil, gasoline, petrochemicals, uranium or other critical commodities from Russia. This tariff will come into effect if Russia refuses to engage in peaceful negotiations with Ukraine or tries to compromise Ukraine's sovereignty. The move is not only aimed at breaking Russia's economic back, but also warning countries that maintain trade relations with Russia.

India has been buying cheap Russian oil

For India, this proposal can pose many challenges. India has always prioritised its energy needs and buying cheap oil from Russia is in its national interest. Despite pressure from Western countries, India has kept its policy clear regarding oil imports from Russia. External Affairs Minister S Jaishankar had earlier said that India will buy oil from where it is cheaper and suitable. But the 500% tariff proposal could have an impact on India's refining and export strategy as India has been buying cheap Russian oil, refining it and selling it to Europe and other countries.