India’s silent but calculated cuddling up to Russian oil is again being looked at globally, as the shadow of sanctions looms large over nations opting to deepen economic links with Moscow. In the face of alerts from NATO and mounting pressure from the United States, especially under the newly revived presidency of Donald Trump, global brokerage house Jefferies has sent out a note that presents a nuanced picture of geopolitics, commerce, and the future of energy prices.
India’s Steady Appetite for Russian Crude
In May 2025, Russia accounted for a whopping 40% of India’s crude oil imports, a jump from 29% in April and a return to the high levels seen in September–October 2024. This surge reflects not just India’s growing dependency on Russian crude, but also the resilience of bilateral energy ties between New Delhi and Moscow in the face of Western disapproval.
Local brokerage JM Financial noted that even as volumes rose, the Russian crude discount narrowed, from $2.7 a barrel last April to $2.5 in May. This implies that even though the price difference continues to exist, it’s becoming less so as global consumers such as India and China continue to display continuous demand for discounted Russian fuel.
Trump’s “Secondary Tariffs” Threat
What is so notable in the most recent development is President Trump’s threat to impose “secondary tariffs”—a step that can lead to a full-fledged trade war. As reported by Jefferies’ latest GREED & fear report, the White House has tested the waters with the idea of imposing 100% tariffs on Russian products and secondary sanctions on countries still buying Russian oil.
This would have a direct effect on nations such as India and China, who have both continued purchasing Russian oil even under Western sanctions. Jefferies fears that such an action could trigger a trade war that not only puts diplomatic relations under pressure but also has the potential to see a sharp surge in international oil prices, considering that Russian output represents around 25% of international oil exports.
“This could be an enormous deal,” Jefferies said, highlighting the threat of supply disruption if the Russian oil flow is restrained by wider sanctions or tariffs.
India: Strategic Defiance, Not Pressure
India is unmoved by pressure from abroad. In reaction to a recent warning by the Secretary-General of NATO of “very hard” secondary sanctions, India’s Petroleum and Natural Gas Minister Hardeep Singh Puri reassuredly reaffirmed India’s stance.
“India is not under any pressure. We will keep buying oil on the basis of national interest and the need of the consumer,” Puri asserted, reiterating the nation’s age-old policy of energy diversification and independence.
India’s position is not new. Ever since the Ukraine conflict began, New Delhi has repeatedly held that low-cost energy is an non-negotiable requirement for its expanding economy and expanding middle class. New Delhi asserts that its oil acquisitions are grounded in realistic calculations and not based on ideology.
A New World Energy Order?
At June 2025, Russian seaborne oil product exports fell 3.4% on a month-on-month basis, according to Reuters data. Although slight, this fall might speed up if secondary sanctions take hold, or if purchasers start to pre-emptively pull away in expectation.
Jefferies points out that Trump’s personal irritation at Vladimir Putin has fueled the flames. Trump, the brokerage says, had been optimistic that his resumption of the presidency could see some form of ceasefire or peace deal in Ukraine. That hope, however, looks misplaced now.
“Such a hope was always unrealistic in GREED & fear’s opinion because the Russian commander has been absolutely consistent on Moscow’s requirements in terms of any peace accord,” the Jefferies report concluded.
This also lowers hopes for an end to the war in the near future, which translates to that the world oil market may be beginning another period of uncertainty—one where supply bottlenecks, diplomatic tensions, and higher prices could become the new norm.
Why India’s Gamble Might Yet Pay Off
Even if the gamble involves dangers, India’s policy might still pay off, at least in the medium-term and short-term. In obtaining cheaper oil from Russia and holding out against Western pressure, India has succeeded in maintaining its energy import bill in check, supporting its current account balance, and providing some protection against inflation for consumers.
The government’s stance is straightforward: India will purchase oil from whoever gives it the best price. And at present, Russia gives one of the best value for money in the world energy market.
Secondly, as the major refining centre in India, the imported oil is partly re-exported as refined fuels to other nations, including even some of those putting sanctions on Russia.
The Road Ahead
Nevertheless, this balancing act cannot go on indefinitely. If the U.S. proceeds with secondary sanctions, Indian refiners and banks would risk penalties or sanctions, specifically those with American market or dollar-denominated global financial system exposures.
For the time being, however, India is wagering that its geopolitical balancing act—having close relationships with both the West and Russia—can proceed without precipitating economic repercussions.
Jefferies’ prognosis summarizes the conundrum: India is currently a “happy buyer” of Russian oil, but the bliss may not last if sanctions are exacerbated and trade tensions get out of hand.
In a more fragmented world where alliances change and national interests are the only constant, India’s energy strategy will continue to be an experiment in how rising economies balance great power rivalries—without being collateral damage.
