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Trump bets big on Russian oil sanctions, but will it pay off?
President Trump has directly sanctioned Russia for the first time since retaking office, over President Putin's refusal to come to the negotiating table on Ukraine. It's a move aimed at weakening Putin’s war economy, says Eurasia Group's Gregory Brew, but one that could have ripple effects from Beijing to the US gas pump.
Trump is getting tough on Russian oil, but to have a real impact on Putin, he'll likely have to go further, which could undermine his big trade deals and push up gas prices. Here at home, US President Donald Trump is running out of patience with Vladimir Putin who refuses to return to the negotiating table for a ceasefire in Ukraine.
Last week, Trump took the surprising step of putting sanctions on two of Russia's largest oil companies, the first time the US has directly sanctioned Russia since he became president. Now, in theory, these sanctions should prevent Russia from selling oil to its two biggest customers, India and China, who together take more than two-thirds of Russia's crude oil exports an important source of income for Putin's war in Ukraine. But as ever, the devil is in the details.
Russia has been facing sanctions and other Western measures to disrupt its crude exports for years now, and it will probably find a way around these new sanctions if the US doesn't keep up the pressure. That means more sanctions will be necessary, not just on Russia, but on its customers. Secondary sanctions on Indian and Chinese refiners who have been buying Russian crude would help cut off the flow, but there could be blowback. Sanctions could anger the Indian and Chinese governments, undermining Trump's efforts to secure big trade deals with Beijing and New Delhi.
And even if some or all of Russia's customers decide to stop taking its oil, Trump could feel the pain back at home. The disruptive impact on Russia's crude oil exports could push up oil prices, which would, in effect, raise the price of gasoline in the United States. That means that after this big initial blow, Trump is likely to take it slow. He'll look to India to voluntarily back away from Russian oil to the EU to put on some new sanctions of its own, and finally to Putin to return to the negotiating table or risk tougher sanctions ahead. As ever, Trump will look to accomplish his goals without causing a big shock to oil prices. It's a delicate balancing act that Trump will have to manage as he tries to avoid nasty economic shocks that could undermine his position back at home.
Russian President Vladimir Putin chairs a meeting with members of the Security Council via video link at the Kremlin in Moscow, Russia, on October 24, 2025.
Will Trump’s new Russia sanctions work?
It’s been a tumultuous couple of weeks for US-Russia relations.
Two weeks ago, US President Donald Trump was considering handing Tomahawk missiles to Ukraine, which would allow Kyiv to strike deep into Russian territory. But, following a phone call with Russian President Vladimir Putin on Oct. 16, Trump decided to chop the Tomahawk plan, and announced a meeting with his Russian counterpart.
That quickly fell apart, though – reportedly because negotiations over a ceasefire deal had stalled – and by Oct. 23, an agitated Trump announced that he was sanctioning Russia’s two largest oil companies, Rosneft and Lukoil, which together produce half of Russia’s oil. This was a step that even the Biden administration refused to take, largely over fears that oil prices would spike, driving up inflation.
Now, combined with Biden-era sanctions on Gazpromneft and Surgutneftegaz, the US has blacklisted Moscow’s four largest crude producers.
There’s just one problem, per Eurasia Group’s Russia expert Alex Brideau.
“The new US sanctions are most likely insufficient to change Putin’s strategy in the war against Ukraine,” said Brideau. “The full effect will depend, in part, on whether the largest importers of Russian oil, India and China, halt these purchases.”
Will China and India halt purchases? Here’s the thing: they just might. This would be devastating for the Kremlin: the two countries combined currently purchase more than 80% of Russia’s crude exports, per the Centre for Research on Energy and Clean Air. What’s more, the oil & gas sector is vital to Russia’s government purse – it’s responsible for 30-50% of total budget revenues.
Even absent any pressure from the government to comply or ignore the sanctions, Chinese refiners are already looking elsewhere, per Eurasia Group’s Practice Head for China David Meale.
“I think there is no chance that China will push its firms to comply with the sanctions for the purposes of improving bilateral relations,” said Meale. “However, their major oil companies have already curtailed purchases due to how the threat of sanctions affects their other international interactions.”
India, meanwhile, has until now resisted Trump’s direct pressure to stop buying Russian oil, in part because it wants Moscow to stay neutral if China-India tensions flare up again. With the new US sanctions in place, though, it could be a different story.
“The sanctions on the two largest Russian oil firms have certainly changed the situation,” said Ashok Malik, partner and chair of The Asia Group’s India practice. “I would expect Russian oil purchases to decline significantly — at least in the medium run — should these measures be carried through.”
It seems the process has already begun: Reuters reported last week that Indian oil refiners are poised to halt purchases of Russian oil.
“A near-total halt in Russian crude imports by late November appears inevitable – not out of political alignment, but because continuing would endanger India’s economy itself,” Ajay Srivastava, founder of the Delhi-based Global Trade Research Initiative, told GZERO.
In a sign that the sanctions are already hurting Russian crude firms, Lukoil unveiled a plan yesterday to sell off its foreign assets.
So it looks like Moscow is in trouble? There are signs that the attritional war is starting to take a toll on the Russian economy, which had been remarkably resilient over the first three years of the war. The International Monetary Fund forecast that the Russian economy will expand by less than 1% this year – it grew over 4% in each of the last two years. Inflation has remained stubbornly high at around 8%. And Russians are becoming less optimistic about whether economic conditions are improving in their area, per a Gallup poll.
“Over a longer period of time,” said Brideau, “these trade-offs may become too difficult for the state to manage.”
A stubborn (Moscow) mule. If there is one last reason that Russia will continue this war, it’s Putin. The Russian leader has displayed an extraordinarily high threshold for pain on the battlefield: his army has suffered huge losses and is advancing in Ukraine at a snail’s pace, yet he has shown no willingness to compromise on his main war objectives. He believes that Ukraine belongs to Russia, and that NATO shouldn’t be continuing to expand along Russia’s border.
If this high pain threshold applies to economic suffering, too, then these sanctions won’t stop the war any time soon.
“Politically, Putin remains strongly committed to his objectives in Ukraine,” said Brideau. “He is willing to risk the long-term health of the Russian economy to pursue these goals.”
In this photo illustration, TikTok logo is displayed on a smartphone with the national flags of China and the United States in the background.
What We’re Watching: Trump and Xi’s Friday phone call, EU introduces new Russia sanctions, US plots Afghanistan return
The world’s most powerful pairing talk TikTok and trade
US President Donald Trump and Chinese President Xi Jinping reportedly discussed how they can keep TikTok online in the United States and whether they can ease trade tensions during a phone call Friday morning, their first since June. The topic of trade is a thorny one, most recently due to disputes over Nvidia chip purchases. As for TikTok, the two superpowers were expected to finalize a deal for the sale of the social media app – a consortium of US firms is set to control the company. If the TikTok deal is completed, it’s possible that Trump and Xi could meet in person during the Asia-Pacific Economic Cooperation summit being held in South Korea around Halloween.
EU introduces new sanctions on Russia
The European Union rolled out its 19th sanctions package to squeeze Russia’s war chest, pledging to end Russian liquified natural gas (LNG) imports by early 2027, blacklist 560 oil tankers, and target crypto platforms and Chinese firms doing business with Moscow. The package still needs to gain the approval of the 27-member bloc, but is expected to be adopted, and comes as Trump has said he is ready to sanction Russia but only if European nations stop purchasing Russian oil.
Is the US about to return to Afghanistan?
Trump declared Thursday that he wants the US military to regain control of the Bagram air base, a move that would return American troops to Afghanistan four years after withdrawal from the Taliban-held state. The move is all about China: the US has become increasingly wary of Beijing’s growing stockpile of nuclear weapons, and Trump highlighted the base’s proximity to the Asian giant as a reason to take it back. Actually regaining Bagram would require cooperating with the Taliban, a once-hostile foe of Washington. The two sides have been talking, but the noises right now suggest that a return to Bagram won’t be easy.Three Numbers, One Story: Trump ups India's tariffs
Three Numbers, One Story: Trump ups India's tariffs
The US imposed steep 50% tariffs on Indian goods Wednesday, doubling an earlier 25% levy after New Delhi increased purchases of Russian oil. The move threatens $48.2 billion in exports, hitting labor-intensive sectors like textiles, jewelry, leather, food, and autos hardest, though pharmaceuticals and electronics are spared. Indian exporters warn of job losses and unviable businesses, while Prime Minister Narendra Modi has vowed not to yield to US pressure on agriculture and dairy access. With trade talks stalled, India is preparing reforms to boost domestic demand and diversify exports toward Europe, Africa, and Southeast Asia.
Russian President Vladimir Putin and then-Indian ambassador to Russia Pankaj Saran attend a ceremony to hand over credentials at the Kremlin in Moscow, Russia, on April 20, 2016.
The Kremlin’s piece in the India-China puzzle: Q+A with Pankaj Saran
When US President Donald Trump threatened 50% tariffs on India last week over its purchases of Russian oil, it put Indian Prime Minister Narendra Modi in a quandary. Delhi has been growing ever closer to the West in recent years, but it also doesn’t want to lose its decades-long relationship with Russia – and it’s all because of China.
“India also wants to maintain a certain relationship with Russia – it keeps Moscow neutral when New Delhi and Beijing fight – which depends a lot on buying something from them,” said Eurasia Group’s South Asia Practice Head Pramit Pal Chaudhuri. “Purchases of Russian defence equipment are falling so oil [is] a useful substitute.”
To better understand why India’s relationship with the Kremlin is so crucial to Modi, as well as India’s views on the Russia-Ukraine war, GZERO spoke to former Indian Ambassador to Russia Pankaj Saran, who served in the role from 2016 to 2018. A diplomat for roughly four decades, Saran was also India’s deputy national security adviser from 2018 to 2021. This interview is edited for length and clarity.
Why is Russia so important to India?
For India, the primary strategic challenge is China, and it is not Russia.
India cannot afford to antagonize Russia, given the fact that in the last few years, Moscow has actually moved closer to China. So we have to keep Russia in play as a nation... The second reason is economic. We need all the natural resources and all the minerals and other resources to fuel our own growth and to meet our own demands. And thirdly, because of the fact that we’ve actually, historically speaking, had no real problems with Russia. We’ve had difficulties with the United States, with China, with Pakistan. But with Russia, the record is actually pretty clean, except for a brief period early on. And fourth, from a cultural and historical perspective, India and the Indian elite, regardless of the political parties in power, feel that you have to go and establish relationships beyond the Western world.
Is there a world in which India stops buying Russian oil?
Yes, sure. If the energy sources were to go back to normal, price-wise, India would also revert back to its normal, traditional sources, like the Gulf. Remember that, until 2022, India was virtually not importing any oil from Russia. This is quite a record, considering we have historically been an importer, and we have not imported oil from Russia, despite the best of relations since forever.
Note: There has been a discount on Russian oil ever since the European Union and the US placed sanctions on Moscow in 2022, right after Russia began its full-scale invasion of Ukraine. Read more here.
Is there a world in which Modi discourages Indian oil firms from buying Russian oil in response to pressure from the United States?
I can’t rule it out. What is also important is the Indian relationship with the United States. In today’s day and age, the India-US relationship has become very important, much more substantive than it ever was in the last 20-25 years… There is a lot at stake in the India-US relationship. He did stop buying Iranian oil during the first Trump administration. But the relationship with Russia is different from India-Iran.
Are the US tariff threats pushing Delhi toward Moscow?
To some extent, but it will not be a sharp swing to Russia, because the connectivities between India and the US have grown so much that it would be a very high-risk game to have any sharp swing towards Russia. But both Moscow and Beijing will definitely be quite pleased to see this sudden emergence of tensions between India and the US.
Turning to the Russia-Ukraine war: former US Ambassador to Russia John Sullivan said he believes Russian President Vladimir Putin doesn’t want a ceasefire and he wants victory. Do you agree with that assessment?
No, I don’t agree at all. I think this is the best chance we have to get Putin to enter into a ceasefire. And I think he also knows it. I think Alaska holds great promise. I think Putin is looking for a way out. He would be ready to get into a ceasefire, otherwise he wouldn’t go to Alaska... The question, of course, will be, what is the price he’s willing to pay if he’s offered a way out.
Is there anything you think Modi could do to encourage Putin to end the war in Ukraine?
This is a good time for Modi to talk with Putin. I’m quite sure that they’ve spoken, and I suspect also, there’s been some back and forth between Europe and Russia through the Indians… It is in India’s interest that this thing ends. I don’t see any way in which India would benefit from a continuation or an aggravation of tensions, which is not the same you can say maybe for the Chinese. Modi has tried to be part of the solution. He’s certainly not a spoiler in the mold of some of the Europeans.
Activists of All India National Congress burn an effigy of US President Donald Trump and Prime Minister of India Narendra Modi during a protest in Kolkata, India, after the Trump administration announced a 25% tariff on Indian goods, on August 1, 2025.
Why is India rebuffing Trump over Russian oil?
The days of “Howdy, Modi” are over.
Six years on from a gigantic rally in Houston, Texas, where US President Donald Trump and Indian Prime Minister Narendra Modi held hands, the two are fighting a war of words and tariffs.
The spat began last week when Trump, desperately seeking ways to pressure Russian President Vladimir Putin to end the war in Ukraine (Putin has ignored Trump’s demands to do so for months), slapped tariffs and threatened fines on India, the second-largest purchaser of Russian crude. The idea was to force Delhi to stop buying Russian oil, starving the Kremlin of revenue for its war machine. On Wednesday, Trump upped the ante further, announcing he would double India’s tariff rate to 50% later this month.
But Modi has so far refused to back down – his Foreign Ministry reiterated on Wednesday that Trump’s proposed tariffs are “unjustified and unreasonable.” Adding fuel to the fire, the leader of the world’s largest economy and the head of the world’s most populous nation are still feuding over whether the US helped broker a ceasefire between India and Pakistan in May.
So why is Modi now clashing head on with the man he once called a “true friend”?
Firstly, there’s a monetary component.
Before the full-scale invasion of Ukraine began in 2022, India only sourced 0.2% of its oil from Russia. Now, Moscow is responsible for roughly one third of all Indian oil imports, with Delhi profiting from a discounted price that resulted from sanctions.
“Indian refineries save about $1 billion a month by buying Russian crude,” said Eurasia Group’s South Asia Practice Head Pramit Pal Chaudhuri, a lower amount than previously – the Russian oil discount has diminished in recent weeks – but still significant.
While India requires this fuel for its own energy needs, it also uses the discounted oil to generate major revenues from exporting refined petroleum products in which crude in an input, like diesel and jet fuels. In this trade, Europe is one of India’s largest markets.
“Purchasing crude oil from Russia and refining it for the market (which includes European countries) has allowed India to not only profit from the purchases but maintain its political and economic relationship with Russia,” Manjari Chatterjee Miller, a senior fellow at the Council on Foreign Relations, told GZERO.
Secondly, India sees this as part of broader trade talks with the US.
The savings that India has made from buying Russian oil have been “useful,” per Chaudhuri, “but losing this would hardly break the bank.” More vital for India are the broader trade talks with Trump, with the next round of negotiations set for Aug. 25.
“There is a belief in New Delhi that Trump’s tariff threats are being used as leverage to extract concessions in order to secure a favourable trade deal with India, reflecting Trump’s proclivity to connect trade and non-trade issues,” said Dr. Chietigj Bajpaee, a South Asia expert at Chatham House.
The US leader has used the Russian oil purchases to justify the pressure on India, but he has another trade interest at hand: he wants Delhi to lower its notoriously high tariffs and grant the US access to its vast agricultural and dairy markets, per Chaudhuri.
Viewing Trump’s moves as a negotiating ploy, Modi sees little interest in backing down.
Thirdly, the Indian public doesn’t want to see Modi surrender to foreign pressure.
Trump’s words have piqued some in India, especially when he suggested that it had a “dead economy.”
“They’ve been seen as a little insulting, to be honest, and it has certainly worsened public opinion [toward Trump],” The Asia Group’s India Practice Chair Ashok Malik, who was a policy adviser in India’s foreign ministry, told GZERO. Modi, he added, now “has to press back.”
This isn’t so much about Trump but rather about rejecting foreign interference, according to Miller. India sees itself as fiercely independent, with a long history of “non-alignment” to any one global pole.
“For India to back down in the face of US tariff threats and essentially downgrade its relationship with Russia will also absolutely not play well among the Indian public,” said Miller. “Modi cannot be seen kowtowing to any US administration.”
Finally, India doesn’t want to lose Russia.
India values its decades-long relationship with Russia, principally because Moscow is a hedge against its chief Asian rival, China. Delhi has long had tensions with Beijing – over border disputes, technological rivalries, and China’s support for Pakistan. While relations with China have thawed a little this year – Modi is visiting China for the first time in seven years at the end of the month – India doesn’t want to anger Russia by bending the knee to Washington, as such a move would risk pushing the Kremlin even closer to Beijing.
“India has a larger interest in keeping links with Russia,” said Chaudhuri. “It believes [in] a combination of ‘respect and money’ that keeps Russia neutral when India and China clash (so far true) and provides other geopolitical benefits.”
The repudiation of US pressure, though, may still have consequences for India’s foreign policy.
“Unless Modi and Trump can reach an agreement,” says Miller “this is an incredibly destabilizing moment for the US-India relationship, and recovery will be difficult.”
India caught in middle as Trump tests out new Russia policy
With friends like these! President Donald Trump on Wednesday announced a new 25% tariff on India, one of the US’s closest allies in Asia.
Although India is a “friend”, Trump said, the country’s notoriously high trade barriers had prevented more commerce with the US. The new measures will go into effect on Saturday.
The move comes smack in the middle of rocky, ongoing trade talks between the US and India. Trump wants to crack open India’s vast market for American firms, while India is keen to protect certain domestic industries – particularly pharmaceuticals, auto parts, and agriculture – as well as the access of Indian students and high-skilled workers to the US.
India is in a tough spot – as Trump carries on talks with various countries at once, PM Narendra Modi doesn’t want to get stuck with a higher US tariff rate than other export-oriented Asian competitors who are all jockeying for access to the massive US market.
But Trump has put Modi in another, even trickier bind. He said India will pay a “fine” for its purchase of Russian oil. While details have yet to emerge, this looks like the first instance of Trump using so-called “secondary sanctions” to pressure Vladimir Putin, who has serially ignored Trump’s ongoing demands to end the war in Ukraine.
Earlier this month Trump threatened a tariff of 100% on any countries that trade with Russia unless the Kremlin stops the war within 50 days. This week he cut the deadline to “10 or 12 days.”
India is one of those countries, big league. Delhi purchases roughly 2 million barrels of oil daily from Russia, accounting for 40% of India’s total oil imports. That amount reflects a huge boost in Russian imports after 2022, when European sanctions over the invasion of Ukraine made Russian crude way cheaper for non-European buyers.
Analysts say that India could certainly go back to its traditional suppliers in the Middle East and Africa, but it would have to accept significantly higher costs compared to the blackballed Russian crude it’s gotten used to.
The dragon in the room. Still, if Trump is serious about landing a blow on Russia’s oil-dependent economy, he’ll sooner or later have to look towards the other
billion-person Asian power that gulps down Kremlin crude. China imports more than 2 million barrels of the stuff a day, about a fifth of its total imports. Together with India, the two countries buy more than 80% of Russia’s oil exports, accounting for about 5% of overall global crude demand.
Beijing is also Russia’s largest trade partner overall. With the US locked in tricky trade talks with its biggest global rival, is Trump ready to swing the secondary sanctions hammer at Beijing too?
President Donald Trump waves as he walks before departing for Florida from the South Lawn at the White House in Washington, D.C., U.S., on March 28, 2025.
Trump scolds Putin over Ukraine after Moscow greenlights his ambitions for Greenland
Is the bloom off the bromance between US President Donald Trump and Russian President Vladimir Putin? On Sunday, Trump took Putin to task over Russia’s foot-dragging on a ceasefire in Ukraine and threatened to tariff Russian oil and impose more sanctions on the country.
“If Russia and I are unable to make a deal on stopping the bloodshed in Ukraine, and if I think it was Russia’s fault ... I am going to put secondary tariffs on oil, on all oil coming out of Russia,” Trump said. “That would be, that if you buy oil from Russia, you can’t do business in the United States … There will be a 25% tariff on all oil, a 25- to 50-point tariff on all oil.” So far, there’s been no reaction from the Kremlin, but Trump said he would be talking with Putin this week.
A Greenland connection? Trump’s comments came a day after he reaffirmed his interest in acquiring Greenland for reasons of American and international security – something that Putin seems just fine with. At an Arctic policy forum in Murmansk on Thursday, Putin expounded on the “historical roots” of America’s interest in the island and said it was a matter that did not concern Russia.
But it may concern Ukraine. In the same speech, Putin said he would support a UN-led administration in Ukraine to hold new elections. And Kirill Dmitriev, Putin’s envoy for foreign investment and economic cooperation, said that while Moscow is open for investment cooperation in the Arctic with the US, “before deals can be done the war in Ukraine needs to end.”