Kathmandu. US President Donald Trump has threatened to impose additional tariffs on Russian oil buyers.
President Trump on Sunday said he was concerned about the slow pace of peace talks with Russian President Vladimir Putin. He threatened to impose additional tariffs on Russian oil buyers if he felt Russia was obstructing efforts to end the war in Ukraine. Trump said, “Those who buy oil from Russia will not be able to do business in the United States. All types of Russian oil will be subject to a 25 to 50 percent tariff.”
Trump is also going to impose reciprocal taxes on all countries of the world, including India, from April 2. That is, whatever country imposes tariffs on American goods, Trump will impose the same tariffs on his own goods.
Russia is India’s major oil supplier. Sources in India’s refining sector said it is not yet clear whether Trump will be able to grant India an exemption if he does or does not act on his warning.
India’s Russian oil imports averaged 1.85 million barrels per day (bpd) in the first 21 days of March, according to data from commodity market analytics firm Kepler. This is higher than 1.47 million barrels per day in February and 1.64 million barrels per day in January.
If the price of Russian oil rises due to tariffs, it could push up global oil prices. India gets Russian oil at relatively cheap prices and the tariffs will be a big blow to India.
The Indian government and refiners have already said they will not buy any of the banned oil. India has not bought crude oil from Iran for years due to US sanctions. The US has exempted some oil companies from sanctions and through that, India is buying some Venezuelan oil.
According to analysts, Trump’s new tariff threat will have no impact on oil prices. They suggest that Indian refineries should stop buying Russian crude if the US moves to impose tariffs on Russian oil buyers.
In such a situation, Indian refineries will return to their traditional suppliers in the Middle East, such as Iraq, Saudi Arabia and the United Arab Emirates (UAE).
According to Giovanni Stanovo, an analyst at global firm UBS, the tariff warning increases the risk to oil supplies. –Agency
