As August 2025 draws to a close, the global oil market finds itself on edge, caught in the crosswinds of escalating trade tensions and a rapidly shifting economic landscape. The immediate spark? U.S. President Donald Trump’s proposed 25% additional tariffs on Russian oil purchases, a move set to take effect at the end of the month. Indian refiners, among the world’s largest buyers of Russian crude, are now treading carefully, delaying orders for September-loading shipments as they await clarity on the potential fallout from these sweeping penalties.
According to The Economic Times, Indian refiners typically place orders for Russian oil about a month before loading, with tankers taking another month to reach Indian ports. This well-oiled routine has now been disrupted, with executives expressing deep concern over the uncertainty surrounding Trump’s tariffs. One refinery executive, speaking to The Economic Times, summed up the mood: “We haven’t awarded any tender for Russian oil for September loading yet,” adding that the decision may come in the coming days, pending clearer signals from Washington and Moscow.
The backdrop to this hesitancy is a high-stakes meeting in Alaska between President Trump and Russian President Vladimir Putin, held just days before the tariff deadline. While the world watched for hints of compromise or escalation, the outcome did little to dispel the fog of uncertainty. Trump, in characteristically ambiguous fashion, remarked, “If I have to do it, I’ll do it. Maybe I won’t have to do it.” This equivocation left markets—and policymakers—guessing about the true trajectory of U.S. trade policy.
But what’s really at stake for India? The numbers tell a sobering story. India imported an average of 1.7 million barrels per day of crude oil from Russia in 2025, according to energy cargo tracker Vortexa. That’s roughly 35% of the nation’s total crude needs—a massive share that can’t be swapped out overnight. “If such a large supply disappears from the market, it will create tension and lead to price increases,” one industry executive warned, as reported by The Economic Times.
It’s not just India that’s bracing for impact. The global oil market, currently oversupplied with prices averaging $66 per barrel in August 2025, could quickly tighten if Indian demand for Russian oil abruptly vanishes. Another executive noted, “India’s abrupt change could tighten the market. While those volumes will eventually find buyers, it may take 2-3 months for global trade to rebalance, affecting prices in the meantime.” With only a handful of countries able to absorb such volumes, Russian oil would need to be redistributed among current buyers like China and the European Union—no simple feat.
Amid the uncertainty, Indian Oil chairman AS Sahney provided a rare note of reassurance, telling The Economic Times that the government had not issued any instructions to refiners regarding Russian oil purchases as of August 19, 2025. For now, decisions are being made on the basis of individual market assessments rather than top-down directives. But the situation remains fluid, and the stakes are high. If Trump follows through with not just tariffs but also so-called secondary sanctions—measures targeting those who trade with sanctioned entities—the disruption could be even more profound.
This isn’t just a story about oil tankers and tariffs. As Mint points out, the world economy is entering what some describe as a profound shift from efficiency to resilience. For decades, global supply chains operated with clockwork precision, moving goods seamlessly across borders in pursuit of the lowest costs. But the pandemic, and now the threat of escalating tariffs, have exposed the fragility of this system. Suddenly, the calculus is changing—from just-in-time to just-in-case.
The essence of resilience, Mint argues, lies in building up stocks rather than relying solely on flows. Take the example of an Indian electric vehicle manufacturer. With the steady supply of rare earths now in doubt, the company faces a trio of costly choices: hold excess inventory of key inputs, diversify its supplier base beyond the cheapest options, or make its operations flexible enough to pivot to alternative products if necessary. None of these strategies come cheap. Holding more inventory means tying up working capital. Diversifying suppliers might mean higher input costs. And adapting factories and labor forces for flexibility is an expensive endeavor.
This new focus on economic resilience, while necessary, raises a thorny question: who foots the bill? In the case of food security or foreign exchange reserves, governments have traditionally shouldered the cost, building up stocks or reserves as insurance against shocks. But as companies begin to stockpile inputs, diversify supply chains, or redesign operations for adaptability, some of these costs will inevitably land on the private sector’s balance sheets. Consumers, too, may unwittingly pay a price, as higher production costs filter through to higher prices at the checkout counter.
“We may be in the early stages of a profound move from efficiency to insurance, from planning for a predictable world to planning for a world of disruptions,” notes Mint. The article speculates that governments could soon mandate backup systems, supply chain stress tests, and other resilience measures for key industries—much as is already done in the financial sector. Such moves would mean even greater government intervention in the private sector, and a complex balancing act between regulatory oversight and market freedom.
None of this is happening in a vacuum. The specter of Trump’s tariffs—and the broader trend toward protectionism—has global implications. Higher tariffs disrupt not just trade flows, but also the very structure of global production. Companies that once optimized for cost and efficiency must now weigh the risks of disruption, political uncertainty, and sudden regulatory shifts. In India’s case, the stakes are particularly acute given its heavy reliance on Russian oil and its ambitions as a manufacturing powerhouse.
And what about the broader economic impact? The macroeconomic effects—on growth, jobs, and inflation—are already the subject of intense debate. But as Mint points out, the microeconomic consequences may be just as significant. On factory floors and company balance sheets, the costs of resilience are real and rising.
As the world becomes more uncertain, governments and businesses alike are being forced to confront hard choices. Disruptions from trade shocks, geopolitical tensions, climate events, and pandemics have all underscored the need for stockpiling resources, building safety nets, and designing backup plans. The era of seamless, low-cost globalization may be giving way to a new age of insurance—a world where resilience, not just efficiency, is the watchword.
For India’s refiners and manufacturers, the coming months will be a test of adaptability and resolve. As the global oil market holds its breath, the decisions made in boardrooms and government offices will ripple far beyond national borders, shaping the contours of the world economy for years to come.
