Deferred 100% US tariffs offer only temporary relief to India as Russian oil imports fall

The United States postponed applying tariffs of up to 100% under the Lindsey O Graham Sanctioning Russia and Iran Act. Those penalties could target countries buying Russian energy. The decision matters because India depends heavily on imported crude, and such tariffs could raise costs and disrupt trade with the United States.

The deferral is not a repeal. The act’s secondary sanctions remain law, while the US Trade Representative continues monitoring Russian energy purchases. Washington can therefore review the waiver and use the tariff threat during negotiations. India has already sought a competitive tariff advantage for its goods.

For now, India avoids the immediate penalty. Yet the underlying risk remains. Experts cited in the article say the waiver offers no lasting energy-security or trade certainty. India has bought more expensive oil from other suppliers and must prepare for renewed US pressure while continuing to buy crude on commercial terms.

India’s Russian crude purchases have dropped by about one-third from their July peak. Imports declined from around 2.7 million barrels a day to approximately 1.8 million barrels a day. This sharp reduction shows that Indian refiners began limiting their exposure before Washington formally activated possible penalties.

Russian oil was once marginal for India. Until 2021-22, it represented a negligible share of the country’s crude imports. By 2025-26, its share had climbed to nearly one-third. Moscow’s steep discounts, offered after Western sanctions hit Russia, made the supply attractive to Indian refiners.

The fall happened even though the threat was deferred. Refiners increased purchases from the United States, West Africa, South America, the UAE, and other West Asian suppliers. The shift reduced India’s dependence on Russian crude, but it also raised costs because replacement barrels generally carried higher prices, freight, and insurance expenses.

India paid much more for crude after reducing its Russian purchases. The monthly import bill rose 31.6%, from $11.7 billion in August to $15.4 billion in September. Volumes increased only 14.2%, from 19 million tonnes to 21.7 million tonnes. Spending therefore grew far faster than the amount imported.

The replacement oil came from the United States, West Africa, South America, the UAE, and traditional West Asian suppliers. These supplies cost more partly because of higher freight and insurance charges. The average Indian crude basket price also rose 28.71%, from $90.19 a barrel in August 2026 to $116.09 in September.

Global disruption added further pressure. Shipping through the Strait of Hormuz was disrupted, while geopolitical tensions pushed prices higher. Across April-September 2026-27, India’s crude import bill reached $90.6 billion, up 46.4%. The shift improved exposure to sanctions but weakened the cost advantage of discounted Russian oil.

Secondary sanctions are penalties aimed at third parties that do business with a sanctioned country or entity. They extend a government’s pressure beyond its own companies and borders. In this case, the Graham Act could threaten countries such as India and China for continuing to buy Russian energy, even when those purchases are not direct transactions with the United States.

The article describes the possible consequence as tariffs of up to 100%. Washington could use that threat against importers, while the US Trade Representative monitors their Russian energy purchases. The mechanism gives the United States leverage over foreign trade decisions by making access to US markets more costly or uncertain.

The penalties have been deferred, not removed. India’s waiver therefore offers time rather than permanent protection. Experts say Washington can review it and revive the threat. That uncertainty may influence India’s energy sourcing and its negotiations for a trade agreement with the United States.

India became a large Russian-oil buyer because Russia’s position changed after 2021-22. Western sanctions hit Moscow, and Russia responded by offering steep discounts on its crude. For Indian refiners, those lower prices created a strong commercial reason to buy more, even though Russian oil had previously been only a negligible part of India’s imports.

The change was substantial. Russian crude’s share rose to nearly one-third of India’s imports in 2025-26. Imports reached about 2.7 million barrels a day at their July peak. The discounted supply helped explain why Russia became central to India’s crude procurement rather than remaining a minor source.

That advantage is now under pressure. Refiners began cutting Russian exposure before the US sanctions law was signed. Russian imports later fell to about 1.8 million barrels a day. India replaced some barrels with costlier supplies, showing that the original attraction was chiefly Russia’s discount and the resulting lower purchase cost.

Indian refiners replaced some Russian crude with supplies from several regions. These included the United States, West Africa, South America, the UAE, and traditional West Asian suppliers. Diversifying sources reduced India’s exposure to the possible US sanctions, but it removed some of the price advantage created by Russia’s steep discounts.

The article identifies two direct reasons for the higher cost: replacement crude itself was more expensive, and freight and insurance charges were higher. A longer or riskier supply journey can add those costs before the oil reaches an Indian refinery. The article also reports a sharp rise in the Indian crude basket price, from $90.19 to $116.09 a barrel.

The result was a rapidly rising import bill. India’s September bill reached $15.4 billion, up 31.6% from August, while volumes rose 14.2%. Refiners therefore reduced sanctions exposure but paid more for energy, leaving India to balance security, price, and geopolitical risk.

An energy importer ultimately pays the crude’s market price plus the cost of delivering it. Global oil prices rise when geopolitical tensions threaten supply or transport. The article reports that the Indian basket increased 28.71%, from $90.19 a barrel in August 2026 to $116.09 in September. That change alone can greatly lift the import bill.

Shipping routes add another layer. A disruption through the Strait of Hormuz can force changes in transport and increase uncertainty. Freight charges cover moving crude to India, while insurance reflects risks linked to the cargo and its journey. The article specifically connects replacement supplies with higher freight and insurance costs.

These factors explain why India’s bill rose faster than its import volume. September volumes grew 14.2%, but spending rose 31.6%, reaching $15.4 billion. The article does not provide a detailed pricing formula, but it shows the practical result: route risk, transport costs, and global prices determine the delivered cost India faces.