New U.S. Sanctions Law Threatens India’s Huge Russian Oil Trade
The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, signed into law by U.S. President Donald Trump, grants the President authority to impose tariffs of up to 100% on goods from countries identified as among the five largest importers of Russian crude or natural gas if they continue significant purchases after the law’s enactment. India, currently the world’s second-largest buyer of Russian oil and responsible for nearly half of its recent crude imports, could face steep U.S. tariffs if it does not curb purchases of Russian-origin oil.
Why It Matters
The law directly links energy buying decisions to potential trade penalties, putting India’s heavy imports of discounted Russian crude at risk and threatening to complicate ongoing U.S.-India trade negotiations. Any imposition of tariffs could affect bilateral relations and India’s approach to securing affordable energy for its population.
Key Facts
- Law: Lindsey O. Graham Sanctioning Russia and Iran Act of 2026
- Signed by: U.S. President Donald Trump
- Tariff authority: President may increase duty up to 100% ad valorem on U.S. imports from countries among the five largest importers of Russian-origin crude oil or natural gas if they knowingly make new purchases after enactment
- India's ranking: Second-largest importer of Russian crude behind China
- India's peak imports: 2.8 million barrels per day (bpd) in July (Kpler vessel-tracking data)
U.S. lawmakers have expanded statutory sanctions on Russia’s energy sector and extended measures on Iran through the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which President Donald Trump signed into law on Friday. The legislation gives the U.S. President discretion to impose trade tariffs of up to 100% on goods imported from countries that rank among the five largest importers of Russian-origin crude oil or natural gas if those countries knowingly make new purchases of such products after the law takes effect.
India, which has been buying large volumes of discounted Russian crude, is singled out by the measure’s potential reach because it is the world’s second-largest importer of Russian oil behind China. Vessel-tracking data from analytics firm Kpler showed India’s imports of Russian crude averaged a record 2.8 million barrels per day in July, up from 2.7 million bpd in June, and accounted for more than half of India’s total crude imports in that month.
Energy analysts expect India’s purchases from Russia to moderate from the July peak. Sumit Ritolia, manager for modelling refinery and oil markets at Kpler, told Bloomberg in late August that India’s Russian crude intake was likely to stabilise just above 2 million bpd. Still, the new U.S. law gives the President the authority to penalise countries that continue heavy purchases, creating a potential trade exposure for New Delhi.
The Indian government responded by underscoring its priority on energy security for 1.4 billion people and saying it will pursue diversified sourcing based on market dynamics. India also said it has raised the matter at high levels with U.S. officials and voiced concerns about the implications of possible tariffs for bilateral ties and the international energy market. Officials added the government would work with industry bodies to protect trade and economic interests. Observers warn the timing could complicate ongoing U.S.-India trade talks; Michael Kugelman of the Atlantic Council said the legislation arrives at an inopportune moment for those negotiations.
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