August 20, 2025: The United States has accused India of making huge profits from buying discounted Russian oil during the ongoing Ukraine war. Treasury Secretary Scott Bessent said India is purchasing cheap Russian crude, refining it, and then selling it abroad for a big profit.
Speaking on CNBC’s Squawk Box, Bessent called the practice “profiteering” and claimed that some of India’s richest families earned around $16 billion in extra profits from the trade. Since Russia invaded Ukraine in 2022, India has become Moscow’s biggest oil customer, importing 1.5 million barrels per day in July, more than China’s one million, according to Kpler data.
The U.S. argues that India refines Russian crude into fuels like diesel and gasoline, which are then shipped to global markets — including parts of Europe that have banned direct imports of Russian oil. This marks a dramatic shift, as India barely imported Russian oil before the war.
In response, President Donald Trump announced a 25% tariff on Indian exports to the U.S., starting next week, to punish New Delhi for its Russian oil dealings. The White House said the tariffs are meant to pressure Russia into negotiating peace with Ukraine.
Energy analyst Bob McNally, a former advisor to President George W. Bush, told CNBC that India’s oil trade with Russia was actually encouraged by Washington at first. He explained that the Biden administration had asked India to buy Russian crude to keep global prices stable after Western sanctions, which risked driving up U.S. gasoline costs. India’s role, he added, was key to a price cap plan designed to limit Russia’s revenue while keeping oil flowing to the world.
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