India’s oil import expenses could rise sharply—by as much as $14 billion—if the country stops buying discounted crude oil from Russia. This warning comes in the wake of US President Donald Trump’s recent threats of additional penalties on India for continuing trade with Russia.

Trump’s Tariff and Threat Over Russian Oil Trade

Trump has already imposed a 25% tariff on Indian exports to the US. He also warned of further penalties if India does not halt its purchases of Russian oil, which the country began buying in large volumes after Russia invaded Ukraine in 2022.

Replacing Russian Oil Could Be Costly

If India gives up Russian crude, the price of global oil could increase by $10 per barrel, according to Prashant Vasisht, Senior Vice President and Co-Group Head of Corporate Ratings at ICRA. This hike would push India’s oil import bill up by $13 to $14 billion.

But that’s not all. Vasisht explained that the cost of gas and petroleum-based products would also rise. He said, “Additionally, domestic gas and LNG imports linked to dated Brent prices would also become dearer thereby impacting all gas consumers such as fertiliser, city gas distribution etc. A $10/barrel increase in Brent prices could increase the cost of LNG purchased annually under the RasGas contract by Rs 3,900 crore.”

How Much Has India Saved on Russian Oil?

India has saved a significant amount by purchasing Russian oil at discounted prices. According to ICRA, the savings from May 2022 to 2025 total around $17.2 billion. However, this benefit might disappear if Trump’s threats force India to stop buying from Russia.

Global Impact: Price Hike and Supply Pressure

This situation will not just hurt India. Oil prices worldwide could rise if India pulls out of the Russian oil market. India and China have been key buyers of Russian crude, helping stabilize international prices by absorbing the excess supply.

If India stops buying Russian oil, there will be more competition for non-Russian sources. That means demand will rise, but supply won’t, so prices will likely go up.

Western Nations May Also Be Affected

Western countries may face two problems:

1. Higher oil prices due to increased global demand.

2. Higher costs for refined petroleum products.

Since 2022, Indian refiners have been importing Russian oil at lower rates, refining it, and then selling it to the West at competitive prices. If India stops doing this, Western nations will have to pay more for refined products.