Der Schwarzmarkt für Öl stumpft Trumps indische Zölle

SS: Based on what’s happening in the black market for oil, the White House’s new import levy on India is backfiring.

President Trump last week doubled India’s tariff rate to 50% to punish it for buying sanctioned Russian oil. Indian refineries have become major buyers of Moscow’s crude since the war in Ukraine began.

The tariffs on India could be affected by the federal appeals court ruling against “Liberation Day” levies on trading partner countries. But the ruling allowed the tariffs to remain in place at least through mid-October to allow an appeal to the Supreme Court.

The higher tariffs caused some ripples in the global black market, where around 6 million barrels of oil trade a day. Spooked Indian buyers dumped sanctioned Russian crude and ordered from the Middle East instead.

Russian cargoes were bought by opportunistic buyers in China: Orders for Russia’s Urals crude that will be delivered in October increased almost 10-fold compared with levels for September, says Tom Reed, a vice president at commodity analytics company Argus Media.

But Moscow cut the price of its oil to win back its Indian customers. A now $7 difference between a barrel of Urals and an equivalent grade from Oman is too good for India’s refineries to refuse. New Delhi also gave the green light for the purchases to continue, so flows are returning to normal.

The unintended effect of the U.S. crackdown has therefore been to make Russia’s already discounted oil even cheaper for India. As of Friday, a barrel of Urals costs India $1 less than it did before the White House first threatened the higher tariff.