Since Russia’s full-scale invasion of Ukraine in early 2022, Western powers have layered on sanctions designed to cut off revenue streams to the Kremlin. Two recent developments an India tariff hike threat over Russian oil imports by the U.S., and fresh EU sanctions that are roiling Nayara Energy contracts are now colliding to crush India’s energy security and maritime trade.
U.S. Threatens India Tariff Hike on Russian Oil Imports
On July 30, 2025, President Trump announced a 25 percent tariff rate plus an additional surcharge on Indian exports to the U.S., openly targeting New Delhi’s purchases of Russian arms and energy. This marks the first time a U.S. president has directly threatened an India tariff hike linked to its status as the world’s second-largest buyer of Russian crude.
As of June 2025, Indian refineries processed roughly 38 percent of Russia’s seaborne oil exports about $220 million per day in Russian state revenue. A Senate bill under consideration would impose crippling 500 percent tariffs on any country buying Russian oil, but Trump is pushing for an unlimited presidential waiver authority instead of a single 180-day waiver.
Beyond tariffs, the U.S. Treasury also sanctioned Iranian tanker operator Mohammad Hossein Shamkhani, who controls around 50 “shadow fleet” vessels frequently used for carrying Russian crude. This move tightens the noose on alternative shipping channels for Russian oil imports.
EU Sanctions Disrupt Nayara Energy Contracts and Shipping
On July 18, 2025, the European Union unveiled its latest sanctions package targeting Russia’s energy sector. Though aimed at Russian exporters, the measures have sent shockwaves through Indian refiners tied to Moscow most notably Nayara Energy, majority-owned by Rosneft and other Russian entities.
Owners of three clean-products tankers chartered to Nayara medium-range vessels Bourbon and Courage (via Seven Islands Shipping Ltd.) and the LR-1 tanker Jag Pooja (via Great Eastern Shipping Co.) have formally asked to end their shipping contracts. They cite secondary-sanctions risk and insurance hurdles.
Nayara’s 400,000-barrels-per-day refinery at Vadinar has cut throughput to manage fuel storage constraints and insurance gaps, forcing some vessels to divert cargos or wait offshore.
In the wake of these disruptions, Nayara’s CEO resigned, and the company even sued Microsoft in an Indian court after the software giant suspended services under pressure from sanctions compliance.
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Ripple Effects on India’s Energy Security
India’s drive to secure cheap crude has been the backbone of its refining gains over the past three years. But now any slowdown in Russian oil imports could push India toward more expensive Middle Eastern crude, eroding refining margins. Tankers willing to carry sanctioned cargoes face steep insurance premiums or bare-boat charters, shrinking the pool of available vessels. New Delhi must deploy its strategic partnership with Russia against the risk of punitive measures by the U.S. and EU, even as it forges closer ties with Western capitals.
What’s Next for Shipping Contracts and Trade Flows?
As EU sanctions bite and the U.S. prepares potential tariff hikes, Indian charterers and refiners are exploring workarounds, some are turning to Russian or Asian underwriters less concerned with EU rules, despite higher costs. Ships may load at secondary hubs to avoid European waters and surveillance. Buyers like Hindustan Petroleum (HPCL) are already diverting tankers like the Sanmar Songbird to alternative suppliers with cleaner paper trails.
India’s seaborne crude imports surpassed 80 million tonnes in 2024, with nearly half sourced from Russia, placing the nation’s energy and maritime sectors at the center of global geopolitical shifts. Intensifying U.S. tariff threats and EU sanctions targeting Russian-linked entities such as Nayara Energy are now testing India’s oil import strategies, potentially reshaping global energy flows and redefining its maritime logistics and tanker contracts.
Source: (India Shipping News),(Maritime Executive).
