The US Senate, on Friday (August 7) passed a bill that would let the Trump administration impose 100 per cent tariffs on countries among the top five global buyers of Russian oil or gas. Passed 86–11 and named the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, honouring the late Republican senator who championed it, the bill next goes to the House, which will reconvene on August 31. The tariff list would be reassessed every 180 days, with an exemption for countries that source under 15 per cent of their gas from Russia and are cutting that share.

The bill has come at a time when the global oil market is already reeling from disruption at the Strait of Hormuz. The Strait carries close to one-fifth of global oil consumption, and the International Energy Agency has called it the biggest shock in the history of the global oil market. A sharp spike in prices has so far been averted through alternative supplies and stockpiles, but the new tariffs could push prices even higher.

India is bound to be among the most affected. It accounts for 36 per cent of Russia’s oil exports; China takes 50 per cent. According to the Centre for Research on Energy and Clean Air (CREA), which tracks Russian exports, India bought Russian crude worth roughly about US$5.2 billion in June 2026 alone. About 40 per cent of India’s oil travels through the Strait of Hormuz, which makes Russian crude – reaching India without needing to pass through the Strait – more valuable still. Continued Indian purchases under 100 per cent tariffs could push oil prices higher. Were India to replace Russian oil altogether, it would need to import instead from West Asia, Africa, Latin America, the US and elsewhere; but if it keeps buying from Russia, its exports to the US could become costlier under the tariff.

If India and China both redirect away from Russia towards West Asia, Africa, Latin America and the US, that shift alone could push up crude prices from those regions too. The Reserve Bank of India has estimated that a 10 per cent rise in international crude prices could lift inflation by around 20 basis points, with the effects likely to spread to airline fares, fertilisers, petrochemicals, plastics, food prices, and manufacturing and services more broadly.

India has some buffers, including the option to draw on strategic reserves, but its room to manoeuvre is limited: the IMF has noted that much of the global oil market’s spare capacity has already been used up. Turkey, meanwhile, accounts for 6 per cent of Russia's crude exports and could face pressure to diversify or absorb higher costs; Japan features among the top buyers of Russian gas rather than oil, and Brazil is a significant buyer of Russian oil products, meaning both could be swept into the tariff regime if the bill’s twice-yearly reassessment pulls them into the top five.

For India, sanctions on Russian oil have become less a trade dispute than an energy security dilemma: keep buying discounted Russian crude and risk punitive US tariffs, or diversify supply and pay potentially higher prices elsewhere.