Trump pressures China and India to stop buying cheap Russian oil

Key Points

• President Donald Trump is urging China and India to cease importing cheap oil from Russia to cut funding for the Kremlin's war against Ukraine.
• Since the European Union's boycott of Russian oil in January 2023, China has emerged as the largest importer of Russian energy, with imports totaling approximately $219.5 billion.
• The appeal of low-priced Russian oil enables refiners in China and India to increase profit margins, thus making it unlikely for these countries to stop their purchases.
• Despite sanctions, Russia's oil sales remain lucrative, generating an estimated $12.6 billion in June alone, with total projected earnings reaching $153 billion for the year.

U.S. President Donald Trump is pushing China and India to stop buying oil from Russia and helping fund the Kremlin’s war against Ukraine.

Trump is raising the issue as he seeks to press Russian President Vladimir Putin to agree to a ceasefire.

But cheap Russian oil benefits refiners in those countries as well as meeting their needs for energy, and they’re not showing any inclination to halt the practice.

Three countries are big buyers of Russian oil

China, India and Turkey are the biggest recipients of oil that used to go to the European Union. The EU’s decision to boycott most Russian seaborne oil from January 2023 led to a massive shift in crude flows from Europe to Asia.

Since then China has been the No. 1 overall purchaser of Russian energy since the EU boycott, with some $219.5 billion worth of Russian oil, gas and coal, followed by India with $133.4 billion and Turkey with $90.3 billion. Before the invasion, India imported relatively little Russian oil.

Hungary imports some Russian oil through a pipeline. Hungary is an EU member, but President Viktor Orban has been critical of sanctions against Russia.

The lure of cheaper oil

One big reason: It's cheap. Since Russian oil trades at a lower price than international benchmark Brent, refineries can fatten their profit margins when they turn crude into usable products such as diesel fuel.

Russia's oil earnings are substantial despite sanctions

The Kyiv School of Economics says Russia took in $12.6 billion from oil sales in June. Russia continues to earn substantial sums even as the Group of Seven leading industrialized nations has tried to limit Russia's take by imposing an oil price cap. The cap is to be enforced by requiring shipping and insurance companies to refuse to handle oil shipments above the cap. Russia has to a great extent been able to evade the cap by shipping oil on a “shadow fleet” of old vessels using insurers and trading companies located in countries that are not enforcing sanctions.

Russian oil exporters are predicted to take in $153 billion this year, according to the Kyiv institute. Fossil fuels are the single largest source of budget revenue. The imports support Russia's ruble currency and help Russia to buy goods from other countries, including weapons and parts for them.