U.S.-China Relations
NextFin News - India has faced no pressure from the United States to reduce its purchases of Russian crude oil, Petroleum Minister Hardeep Singh Puri said on Tuesday, a statement that lands days after President Donald Trump waived the very sanctions that threatened to impose tariffs of up to 100% on Indian goods.
"I never felt anything," Puri said at an industry event in Goa when asked whether Washington had pressed New Delhi to cut its Russian oil imports. The remark captures a central tension in the world's third-largest oil importer's energy policy: India has kept buying discounted Russian barrels through sanctions, tariffs, and diplomatic pressure alike, and the economics have consistently outweighed the diplomacy. The waiver - granted under a national-interest clause in the sanctions law itself - means India will not be penalised for sourcing oil from Russia, its biggest crude supplier.
The Waiver That Removed the Tariff Sword
The backdrop to Puri's comments is a sharp reversal in US sanctions policy. Under the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which cleared the Senate 86-11 in August and the House of Representatives 262-159 on September 16 before being signed into law on September 18, the five largest purchasers of Russian crude oil and natural gas faced tariffs of up to 100% on their exports to the United States if they knowingly made new purchases on or after October 18. The same law authorized duties of up to 500% on Russian goods.
India, the world's largest buyer of Russian seaborne crude, sat squarely in the law's sights alongside China and Turkey. Yet late on Friday, October 16, Trump invoked section 115(a) of the Graham Act to waive the application of the duties set out in sections 112 and 113, citing the US national interest. The executive order was explicit:
"Pursuant to section 115(a) of the Graham Act, I hereby waive the application of any duties provided for in sections 112 and 113."
The waiver did not come without a quid pro quo. It follows a deal between Washington and Moscow to bring Russian diesel into US and global markets in an effort to cool energy prices that spiked during the US-Israel war on Iran. The US Treasury also issued a temporary licence suspending sanctions on Russian diesel deliveries until April 2027. On Wednesday, Russian Deputy Prime Minister Alexander Novak said the first tanker loaded with Russian diesel would sail for the United States on Thursday, with more batches to follow - the first tangible shipment under the Putin-Trump fuel arrangement.
For New Delhi, the sequence carried its own message. India had informed Washington on several occasions that any tariffs under the new law would adversely affect bilateral relations, and US envoy to India Sergio Gor said only on Thursday that Trump would decide on the waiver within ten days. Puri's "I never felt anything" reads less like a description of quiet diplomacy and more like a statement of strategic autonomy preserved - and of a partner that kept buying while the sanctioning power reconsidered its own energy needs.
When asked directly whether there had been pressure to cut Russian oil imports, the minister's answer was terse and unambiguous:
"I never felt anything."
The Numbers Behind India's Russian Oil Bet
The scale of India's reliance on Russian crude explains why New Delhi would not bend easily. In August, Russian crude accounted for roughly 44% of India's total oil imports, according to industry and government data reported at the time. Vessel-tracking data compiled by Kpler showed Indian purchases of Russian crude running at 2.6 million barrels per day in June and 2.57 million barrels per day in July before easing to 1.82 million barrels per day in September, as Ukrainian attacks on Russian export infrastructure and competition from China for Russian barrels dented intake.
Other readings of the same tracking data put the July peak higher still: one account cited a record 2.8 million barrels per day, with Russian crude's share of India's overall crude imports reaching 55.5% that month. The discrepancy between the two snapshots matters less than the direction of travel: Russia has become India's dominant supplier, displacing Middle Eastern volumes that once anchored New Delhi's energy security. Before the 2022 invasion of Ukraine, Russia supplied barely 2% of India's crude; in four years the ranking has inverted.
The driver is straightforward arithmetic. India imports more than 80% of its crude oil needs, so even a modest per-barrel discount compounds into billions of dollars of annual savings on the import bill and lower domestic fuel prices. Russian Urals crude has traded at a persistent discount to Brent, and for refiners running on thin margins, the choice is not geopolitical - it is a refinery margin decision. When the alternative is paying full price for Middle Eastern grades amid supply risks in the Strait of Hormuz and the Bab el-Mandeb, the discounted Russian barrel is the rational purchase.
That logic has held through multiple pressure cycles. The United States imposed a 25% penal duty on Indian goods in August 2025, lifting the tariff on Indian exports to 50%, before the rate was reset to 18% under an interim trade framework in February 2026 that included Indian commitments on Russian crude. Purchases nonetheless continued at elevated levels through the summer, signalling that tariff leverage alone has not redirected India's crude slate.
There is a second channel worth tracing: the rupee and inflation. A sustained 100% tariff on Indian exports would have hit textiles, pharmaceuticals, and engineering goods - sectors already under pressure from a rupee that touched lifetime lows during the Middle East flare-up. Higher oil prices feed directly into India's consumer inflation and its current-account deficit, giving the Reserve Bank of India less room to cut rates. The waiver therefore does more than protect refiners; it removes a second-round inflation shock that would have complicated monetary policy into the festival season.
The Refined-Products Arbitrage: India's Hidden Leverage
The economics run deeper than cheap crude. Indian refiners do not just consume Russian barrels - they arbitrage them. By buying discounted Urals and ESPO grades and exporting diesel and jet fuel at global market prices, they capture the spread between sanctioned crude and unsanctioned products. That is the mechanism that makes Russian oil doubly valuable to India: it lowers input costs and lifts export margins at the same time.
The scale is material. In July, India's Reliance Industries loaded roughly 4 million to 5 million barrels of diesel at its Jamnagar site for Europe and Brazil, according to ship-tracking data and trade sources - a return to pre-conflict levels and the highest in ten months. The timing was no accident: European diesel profit margins had touched a record $74 a barrel as regional stockpiles fell to their lowest since 2014 and escalation in the Middle East constrained Gulf exports to Europe. Reliance's Jamnagar complex, the world's largest single-site refinery, sits at the centre of this trade - which is precisely why Secretary of State Marco Rubio's planned visit there matters.
This arbitrage also explains why the Graham Act's design was always going to be hard to enforce. Punishing India for buying Russian crude would have reduced the flow of refined products to Europe and Latin America at the very moment those regions needed supply, pushing global diesel prices higher and hurting the same Western consumers the sanctions were meant to protect. The waiver acknowledges that reality: you cannot sanction the buyer without tightening the market you are trying to cool.
Washington's Contradiction: Sanctions Versus Cheap Oil
Here lies the second-order story that Puri's remark exposes. The United States passed a law designed to punish the largest buyers of Russian oil, then waived it - not because those buyers promised to stop buying, but because Washington itself wanted Russian barrels back in the market. The transmission mechanism is direct: the Graham Act would have pulled Russian volumes out of global trade by penalising the buyers, tightening supply and pushing prices higher; the waiver and the diesel deal do the opposite, reopening the flow to bring prices down.
That is a contradiction with consequences. Secondary sanctions work only when the sanctioning power is willing to absorb higher energy costs. The moment US domestic fuel prices became a political liability, the administration chose cheaper oil over sanctions enforcement. India's refiners, reading that signal, now face a weaker threat: the 100% tariff sword remains in the statute, but the hand that holds it has shown it will trade enforcement for price relief.
The market registered the shift. On Monday, December West Texas Intermediate crude futures fell 2.2% to $100.96 a barrel, while December Brent crude dropped 1.8% to $114.57 a barrel, as traders weighed the sanctions waiver against persistent Middle East supply risks. As of early trading on October 27, WTI was changing hands near $101.20 a barrel, down about 0.5% on the session. Oil has rallied sharply through 2026 - WTI's 52-week range has stretched from an intraday low near $55 in December 2025 to a high above $119 in March - so any signal of additional supply is priced as relief.
The relief, however, is bounded. Brent near $115 is still roughly double its pre-2022 average, and the premium reflects a market that prices war risk in the Persian Gulf and the Red Sea into every barrel. The waiver removes one source of supply risk - the prospect of sanctioned Russian volumes disappearing - but it does nothing for the disruptions that lifted prices in the first place.
The Counter-Thesis: A Waiver Is Not a Repeal
The strongest case against reading Puri's statement as a clean victory for Indian energy independence is that the waiver is tactical, not structural. Section 115(a) grants the President discretion to waive duties; the same discretion can withdraw it. The Graham Act remains on the books. The 100% tariff threshold - new purchases by the top five importers on or after October 18 - is still the law, merely suspended by executive action rather than repealed by Congress. A future administration, or the current one under different circumstances, could let the waiver lapse.
The diesel deal with Moscow provides the tripwire. If Russian diesel shipments stall, if prices fall back without the volumes, or if geopolitical priorities shift after the US-Israel conflict cools, the incentive to keep the waiver in place weakens. Rubio's upcoming visit to Mumbai and Jamnagar will be a forum for exactly this pressure, even if it is no longer backed by an imminent tariff. Congress, too, has shown impatience: 22 House lawmakers pressed the President in mid-October to implement the sanctions law, calling the diesel deal a concession to Moscow.
There is also the question of whether India's leverage is as durable as the discount. If the Russia-China price war for Asian barrels narrows - if Beijing's teapot refiners return in force, or if Russian export capacity is hit by sustained Ukrainian strikes on pipelines, ports, and loading terminals - the discount that underpins India's entire calculus could compress. In that scenario, New Delhi would face the worst of both worlds: the geopolitical cost of buying Russian oil with a thinner economic reward, and a sanctions regime waiting to snap back.
What Comes Next: Three Time Horizons
In the short term, the waiver removes the immediate tariff overhang from Indian refiners and from US-India trade talks. The relief is concrete: no 100% duty on Indian exports, no forced rerouting of crude cargoes, and continued access to discounted Russian volumes while Rubio visits Jamnagar. Indian oil marketing companies and private refiners can plan purchases without the binary risk of a punitive duty landing mid-contract.
Over the medium term, the question is whether the US-Russia diesel arrangement holds. Base case: Russian diesel flows resume gradually, energy prices stabilize, and the waiver is extended through its April 2027 horizon. Upside case for India: the discount on Russian crude widens further as China's demand softens, lifting refiner margins and widening the current-account benefit. Downside case: the diesel deal falters, the waiver is not renewed, and the Graham Act's tariff trigger reactivates for purchases after the next enforcement date, forcing refiners to scramble for costlier Middle Eastern or American grades.
In the long term, this episode points to a structural shift rather than a cyclical dip. The global oil market has reconfigured around sanctioned barrels: Russia sells crude to Asia at a discount, Asia refines it and exports products, and Western consumers indirectly absorb Russian hydrocarbons through the refined-product trade. That structure will not revert on its own because it is profitable for every commercial actor in the chain - Moscow gets revenue, Indian refiners get margin, and Western buyers get cheaper diesel. The cyclical leg - the size of the discount, the pace of Russian exports, the level of prices - will oscillate with war, OPEC policy, and demand. The structural leg - the rerouting of Russian crude to Asia and the diminished credibility of buyer-targeted secondary sanctions - is harder to undo.
The falsifying signal for that structural read is specific and observable: if the United States reimposes the Graham Act tariffs on India, or if India's share of Russian crude falls back toward pre-2022 levels of roughly 2% for two consecutive quarters without a supply disruption forcing it, then the "new normal" thesis is wrong. The monthly import data and the status of the section 115(a) waiver are the two dials to watch.
Puri's "I never felt anything" may be the most honest line of the episode. India did not outmaneuver US pressure through diplomacy; it simply kept buying while Washington decided that cheap oil mattered more than punishment. The market has now priced that contradiction into crude - and the next test is whether the waiver survives the moment prices stop being a problem.
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