Treasury Secretary Scott Bessent has leveled sharp criticism at India, accusing the nation of profiting from discounted Russian oil imports amidst the ongoing war in Ukraine. In an interview on CNBC’s “Squawk Box,” Bessent described India’s actions as “arbitrage,” labeling them as unacceptable profiteering. “They are just profiteering. They are reselling,” he stated.
India has become the largest buyer of Russian oil, purchasing approximately 1.5 million barrels per day (bpd) in July alone, according to data from energy analytics firm Kpler. This shift marks a stark contrast to India’s previous minimal oil imports from Russia before the Kremlin’s full-scale invasion of Ukraine in February 2022. As sanctions hit Russia, oil from the country was sold at a discount, allowing India to refine it into gasoline and diesel, which it then exports to regions, including Europe, that have sanctioned Russia. Matt Smith, an oil analyst at Kpler, noted this cycle of buying and reselling as a key reason behind India’s surge in imports.
In light of India’s controversial oil purchases, former President Donald Trump has announced a 25% tariff on Indian exports to the U.S., aimed at penalizing New Delhi for its role in the Russian oil market. These tariffs, set to go into effect next week, are part of Trump’s proposed “secondary tariffs” on countries like India that purchase oil from Russia, a measure intended to pressure the Kremlin toward a negotiated settlement in Ukraine. Interestingly, the U.S. has opted not to impose similar tariffs on China, which also imports significant amounts of Russian crude.
Bessent acknowledged that China’s imports might be viewed more favorably by the Trump administration because the country had already been a major buyer of Russian oil prior to the invasion. However, it’s worth noting that India’s substantial engagement with Russian oil began at the urging of U.S. officials. Bob McNally, president of Rapidan Energy and a former advisor to President George W. Bush, elaborated that the Biden administration convinced India to accept Russian oil after other nations imposed strict bans. The goal was to avoid a spike in oil prices that could lead to increased gasoline costs in the U.S.
According to McNally, “India played a key role in the price cap sanction mechanism designed by the U.S. and its European allies to ensure that Russian oil still flowed while attempting to limit Moscow’s revenue.”
As tensions rise over global energy flows and sanctions, the dynamics of oil trade during wartime continue to draw scrutiny. CNBC has reached out to the Indian embassy in the U.S. for comments on these accusations and the new tariffs, but no response has been reported so far.
This complex interaction of international relations, energy policies, and economic sanctions highlights the ongoing challenges faced by nations navigating the geopolitical fallout of the conflict in Ukraine. The situation remains fluid as stakeholders in the energy market adapt to the pressures of evolving diplomatic landscapes.
Original Source: https://www.cnbc.com/2025/08/19/us-accuses-india-of-profiteering-from-russian-oil.html
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Publish Date: 2025-08-19 19:01:00
