Washington, D.C. – US Treasury Secretary Scott Bessent has urged the European Union (EU) to stand with the United States in exerting additional economic pressure on Russia, warning that countries continuing to purchase Russian crude oil may face fresh trade penalties.
Speaking at a policy forum, Bessent said the United States will not hesitate to impose stricter measures on nations “indirectly financing the Russia-Ukraine war through energy trade.” His comments came shortly after the Donald Trump administration slapped a 25% additional tariff on India’s crude oil imports from Russia, a move that has sparked debate across global markets.
Why the US is Pushing for More Tariffs
The US maintains that Russia’s oil revenues remain a lifeline for its military operations in Ukraine. Despite Western sanctions, Moscow continues to export large quantities of crude, with India and China emerging as major buyers. According to American officials, this trade undercuts the impact of sanctions imposed by the West and prolongs the conflict.
“Every dollar Russia earns from oil sales is a dollar that fuels aggression in Ukraine,” Bessent emphasized. He added that aligning US and EU strategies would “close loopholes” and increase the economic cost for Moscow.
Impact on India: A Strategic Challenge
India has become one of the largest importers of discounted Russian oil since the war began. The Trump administration’s decision to raise tariffs by 25% on Indian oil trade linked to Russia is being seen as a strong signal to New Delhi.
Analysts suggest the move could:
- Raise costs for Indian refiners who rely on cheaper Russian crude.
- Strain US-India trade relations, particularly at a time when both nations are expanding defense and technology cooperation.
- Push India to explore alternative crude suppliers, though this may increase its overall import bill.
Indian officials have so far defended their oil imports as a matter of national energy security, stressing that affordable crude helps stabilize domestic fuel prices.
EU’s Position Under Scrutiny
While the EU has already reduced most of its dependence on Russian energy, some member states remain cautious about aligning with US-style tariffs on third countries. European leaders are expected to discuss Washington’s proposal in upcoming policy meetings.
Experts note that if the EU joins the US, it would significantly tighten global trade pressure on Russia, but could also trigger a reshuffling of global crude flows, impacting prices worldwide.
Global Market Reaction
- Oil Prices: News of possible wider tariffs caused a brief spike in global crude benchmarks as traders anticipated potential supply disruptions.
- Financial Markets: Emerging markets like India are bracing for volatility in currency and stock exchanges if tariffs escalate further.
- Geopolitical Tensions: The move adds a fresh layer of complexity to the already tense landscape of global trade and energy politics.
Key Takeaway
The US call for coordinated action on Russian oil highlights the growing intersection of energy security, geopolitics, and global trade policy. With tariffs already hitting India and more potential measures on the table, the coming weeks could reshape not only US-India relations but also the broader international response to Russia’s war in Ukraine.
