In a bold geopolitical move, US President Donald Trump has reiterated his intent to impose secondary tariffs on countries that continue purchasing oil from Russia. This move, aimed at pressuring Moscow into a ceasefire in Ukraine, could significantly disrupt global oil markets, intensify geopolitical tensions, and reshape energy alliances.
Understanding Secondary Tariffs
Secondary tariffs are punitive measures not imposed directly on Russia, but against third-party nations that engage in trade with Russia—particularly in oil, gas, and uranium. The proposed tariffs could be as high as500%, targeting imports from countries that violate US sanctions. This strategy is designed to isolate Russia economically by deterring its trading partners, but it risks collateral damage across global supply chains.
Global Oil Production and Consumption Landscape
As of mid-2025, global oil production stands at approximately 101 million barrels per day (bpd), with consumption closely matching at 100.5 million bpd, according to the International Energy Agency (IEA). The top producers include the United States (12.9 million bpd), Saudi Arabia (10.5 million bpd), and Russia (9.8 million bpd). Russia remains a critical supplier, especially to China, India, and parts of Eastern Europe, which have increased imports since the Ukraine war began.
If Russian oil flows were completely banned, replacing its supply would be extremely challenging for global markets as it contributes roughly 10% of global supply. Even in an optimistic scenario, the world could replace 5–6 million bpd, leaving a shortfall of 3–5 million bpd.
Potential Market Impact
If secondary tariffs are enacted, they would likely lead to a sharp price increase, global inflation, energy rationing in vulnerable economies and accelerated investment in renewable energy and gas markets.
Restricting Russian oil indirectly through its buyers could reduce global supply, especially if major importers like India and China face pressure to cut back. This supply shock could push Asian Brent crude prices to exorbitant highs, raising worries over inflation worldwide.
Countries dependent on Russian oil may scramble for alternatives, increasing demand for Middle Eastern and U.S. oil. This could strain existing production capacities and lead to regional energy shortages, particularly in Asia and Eastern Europe.
Geopolitical Ramifications
Meanwhile, the proposed tariffs are not just economic tools—they’re geopolitical weapons. If President Trump enforces this tariff on China and India—two of Russia’s largest energy customers—could face significant economic and strategic challenges. These tariffs would not only raise the cost of imports but also strain diplomatic ties with the US, forcing both countries to recalibrate their energy and trade policies.
However, in such a high tariff environment, China and India may adopt a multi-pronged strategic approach as a response to the US. Both countries could accelerate deals with Middle Eastern supplies and may find new suppliers from Africa and Latin America. China may boost Yuan based trade to bypass dollar-based sanctions. In addition, diplomatic measures, enhancing renewable investments and boosting domestic production may also expected gradually.
President Trump’s proposed secondary tariffs represent a high-stakes gamble. While they aim to pressure Russia into peace talks, the global repercussions could be severe—fuelling inflation, disrupting energy markets, and reshaping geopolitical alliances. As the world watches, the decision could mark a turning point in both the Ukraine conflict and the future of global energy diplomacy.
First published in The Economic Times
