Crude Calculations: India's Russian Oil Strategy and the Tariff Trap

AbstractThis article examines India’s strategic pivot toward Russian crude oil imports following the 2022 invasion of Ukraine, analyzing the economic rationale, geopolitical consequences, and distributional outcomes of this policy. While discounted oil purchases yielded substantial macroeconomic savings, the benefits were unevenly distributed, bypassing consumers and enriching private refiners. The study further evaluates the impact of a hypothetical 50% tariff imposed by the United States in response to India’s energy strategy, using a quasi-experimental design to assess sector-specific economic consequences. Findings reveal that while India’s approach bolstered short-term economic resilience, it triggered trade tensions and exposed vulnerabilities in key export sectors. The paper concludes by discussing the broader implications for India’s refining diplomacy and its trade relationships with the European Union and the United Kingdom.KeywordsIndia, Russian oil, energy security, strategic autonomy, trade retaliation, US tariffs, refining diplomacy, quasi-experimental analysis, macroeconomic impact, export vulnerability