The writer is co-founder and director of market intelligence at Energy Aspects
If Donald Trump really wanted to drive India’s oil imports from Russia down to zero, the consequences might not be what the US president intended. Trump has threatened to impose an additional 25 per cent tariff on Indian goods from Wednesday over the country’s purchases of Russian oil. That would increase total tariffs to 50 per cent.
Indian imports of Russian crude average anywhere between 1.5-2mn barrels a day, based on OilX data. If this were stopped overnight and India had to buy elsewhere, oil prices would jump massively and inflation would be pushed up in the US and elsewhere. For the oil market, the question is: does Trump have the stomach to raise prices on US consumers?