Targeted by Trump with sky-high high tariffs, India and Brazil appear set to deepen crude oil supply partnership

Indian refiners’ hefty imports of Russian crude have surfaced as a major irritant for the Donald Trump administration. Trump recently announced an additional 25 per cent tariff—over and above the 25 per cent tariff announced earlier on Indian goods—as a penalty for India’s Russian oil imports. New Delhi has called the targeting of India over the purchase of Russian oil “unjustified and unreasonable” and said these imports began as its traditional supplies were diverted to Europe, with the US having “actively encouraged such imports by India for strengthening global energy markets stability”.

Trump has also targeted Brazil with a 50 per cent tariff over what he has termed as a “witch hunt” against former Brazilian President Jair Bolsonaro, who is seen as an ally of Trump. Notably, Prime Minister Narendra Modi spoke with Brazilian President Luiz Inacio Lula da Silva shortly after Trump announced the additional tariff on Indian goods.

India has stated over the years that as a country that depends on energy imports, it will buy oil from wherever it gets a good deal, as long as the oil is not under sanctions. To be sure, Russian oil is not under sanctions, and is only subject to a price cap imposed by the US and its allies that applies if Western shipping and insurance services are used for transporting the oil.

India’s top’s 10 crude oil suppliers in H1 2025

So far, India has not issued any advisory or directive to its refiners with respect to their Russian oil purchases. Nevertheless, New Delhi appears eager to increase import volumes from other suppliers to strengthen its energy security and keep dependencies on one or a small group of suppliers in check. Russia is currently India’s largest supplier of crude oil and accounts for 35-40 per cent of India’s total oil imports by volume. In all, India’s oil import basket includes crudes from around 40 countries already, although a bulk of the supplies are from Russia and West Asia.

“Brazilian crude exports to India will be closely watched in the coming months, particularly as both countries navigate the impact of US tariffs related to Russian oil imports,” said Benjamin Tang, head of liquid bulk at S&P Global Commodities at Sea.

While freight, arbitrage opportunities, and availability of spare cargoes would determine the commercial viability of Brazilian crude among Indian refiners, growing diplomatic efforts between the governments of India and Brazil are expected to yield positive results. Although India and Brazil are evidently pushing for more crude oil trade, several logistical and pricing challenges persist, along with competition from West Asian oil suppliers, who are located much closer to India and have been the traditional mainstay of India’s oil imports. India may also face more competition for Brazilian oil from China.

Crude inflows to India from Brazil jumped about 75 per cent year-on-year in January-June to 72,000 barrels per day (bpd) from 41,000 bpd, signaling a growing affinity of Indian refiners for crudes from oil producers that are not part of the global cartel OPEC, according to SPGCI. Over the years, Brazil has emerged as a major non-OPEC oil supplier. Public sector refining major Indian Oil Corporation (IOC) and private sector giant Reliance Industries (RIL) have been the primary buyers of Brazilian crude.

SPGCI noted that both Modi and Petroleum Minister Hardeep Singh Puri visited Brazil in recent months to discuss how India can increase crude oil imports from the South American country and explore opportunities for collaboration on offshore deep and ultra-deepwater exploration and production projects.