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Putin's oil deal in danger: India and China turn away!
US sanctions threaten Russia's economy while India and China reduce their oil imports. What does this mean for the global market?
Putin's oil deal in danger: India and China turn away!
The latest US sanctions against Russian oil refineries Rosneft and Lukoil represent a significant setback for the Russian economy. US President Donald Trump has announced the measures to reduce Russia's oil revenues, which are used to finance the war in Ukraine. These sanctions are unsettling key trading partners of Russia, particularly India and China, which previously imported significant amounts of Russian oil. Loud Mercury This could have serious economic consequences for Russia.
Indian refiners, including Reliance Industries and state-owned companies such as Indian Oil Corp, plan to reduce or completely stop their imports of Russian oil. This comes against the backdrop of Trump's threats of secondary sanctions against countries that continue to receive Russian oil. These sanctions could result in significant penalties for doing business with sanctioned countries, pushing India and China to reconsider their dependence on Russian oil. Indian oil represented about 60% of Russia's oil imports before sanctions, amounting to nearly 2.2 million barrels per day in the first half of 2025.
Impact on India
India had seen a dramatic increase in its oil purchases from Russia by 2024, from 0.1 million barrels daily in 2021 to 1.9 million barrels in 2024. Still, India stresses that it wants to protect its energy security and economic sovereignty and criticizes the West for hypocrisy while the EU continues to import Russian energy. Loud Focus India will review its oil imports from Russia in the coming months and may look to alternatives from Brazil and the Middle East.
Trump previously imposed tariffs on Indian imports tied to oil trade with Russia. These new levies could add up to $11 billion to India's oil bill. Despite the waves of sanctions, India could take up to a year to fully reduce its dependence. India assumes a critical role in this situation as a sudden drop in Russian oil imports could push up global prices.
The situation in China
On the other hand, Chinese state-owned companies such as PetroChina and Sinopec are also suspending purchases of Russian oil. China currently imports about 1.4 million barrels per day, mostly from independent refineries. Still, it is unclear to what extent China will adjust its oil purchases, as it may be exempt from the new US measures - a fact that would strengthen its bargaining power. Chinese banks are also showing increasing reluctance to do business with Russia, which could lead to opaque solutions.
Analysts warn that a significantly reduced export of 5 million barrels per day from Russia could lead to a sharp rise in oil prices to as much as $110-120 per barrel. This would not only have consequences for the Russian economy, but could also lead to a general increase in inflation, which is already estimated at 15-20%. The Russian government under Vladimir Putin is responding to the sanctions by portraying the consequences as serious, but not overly damaging to the economy.
Given these developments, it remains to be seen how Russia will respond to Western sanctions pressure and whether the US might relent on its sanctions commitments to India. daily news also reports on the rising oil prices, which are being further fueled by the new sanctions.