China Buys More Russian Oil as US Tariffs Push India to Cut Orders

Discounted Russian cargoes find new buyers in China

Chinese refiners have booked at least 15 cargoes of Russian crude for delivery in October and November as India cuts purchases under pressure from US tariffs. Each cargo carries between 700,000 and 1 million barrels, putting the combined bookings at between 10.5 million and 15 million barrels.

By August 21, 2025, the shift was opening new routes for Russian oil while exposing a limit to Moscow's options: China was buying more, but its additional purchases remained much smaller than the volumes India was giving up.

Kpler, a company that tracks commodity shipments, put August shipments of Russia's flagship Urals crude to India at about 400,000 barrels per day, down from an average of 1.18 million earlier in the year. That is a decline of roughly two thirds, or about 780,000 barrels each day.

China's purchases of Urals, meanwhile, reached about 75,000 barrels per day in August, nearly double the average for the year. The increase gives Russia another outlet, although the scale remains far below India's earlier purchases.

The immediate pressure comes from US President Donald Trump's decision to double tariffs on Indian exports from 25% to 50%, citing India's purchases of Russian oil. Textiles, gems, auto parts and seafood are among the sectors affected. China, the largest buyer of Russian oil, has so far avoided a comparable penalty tied to those purchases.

The result is a dispute connecting three different markets: the oil Russia needs to sell, the fuel Asian refineries need to buy, and the goods Indian businesses sell to American customers. Decisions in one market are now changing costs and trade routes in the others.

How India and China became central to Russia's oil trade

Russia turned increasingly toward Asian buyers after its 2022 invasion of Ukraine brought Western sanctions and embargoes that cut it off from traditional European markets. Moscow offered steep discounts to keep oil flowing, and India and China became the main drivers of demand.

India emerged as Russia's fastest growing oil customer. By the middle of 2024, it was importing as much as 1.7 million barrels per day from Russia, more than a third of its total crude needs. China, the world's largest oil importer, also increased purchases, with Russian crude accounting for roughly 13.5% of its imports.

Discounts mattered because refineries buy crude and process it into usable fuels. A lower purchase price can improve the difference between what a refinery pays for its raw material and what it receives for its products. Russian oil therefore offered a commercial attraction alongside its role in securing supplies.

In 2024, India imported $53 billion worth of Russian petroleum and crude oils, while China's imports totaled $62.6 billion. Those figures show why both customers matter to Moscow: together, their purchases represented $115.6 billion in trade in those products.

Oil and gas are Russia's biggest exports. Its shift toward Asia helped maintain sales after Western restrictions, but also made decisions in New Delhi and Beijing increasingly important to Russian revenue.

US tariffs put Indian exports under pressure

Trump announced a new round of tariffs in July 2025 aimed at countries continuing to buy Russian oil. India faced an increase from a 25% tariff to 50%, with the White House accusing it of "profiteering" from discounted supplies and weakening efforts to isolate Moscow over the war in Ukraine.

A tariff is a tax on goods entering a country. In this case, Washington used the cost of access to the American market to pressure India over oil purchases made elsewhere. For Indian businesses selling affected goods to the US, the dispute could mean higher prices for customers, demands for lower prices from buyers, or lost orders.

Trade experts warned that the new levies could cut Indian exports by 40% to 50%. Textiles, gems, auto parts and seafood are important because the consequences would reach businesses and workers beyond the energy sector. A decision about crude supplies could therefore carry costs for industries that do not buy Russian oil themselves.

India's refiners pause orders as shipments fall

Indian state owned and private refiners paused new orders as tariff pressure increased. Kpler's figures showed Urals shipments falling from an earlier average of 1.18 million barrels per day to about 400,000 in August, a drop to roughly one third of the previous level.

Nayara Energy, India's third largest refinery and a major Russian oil buyer, received only four cargoes in August. No further deliveries were expected before the end of the month.

The timing helps explain how the dispute developed and why some Chinese purchases will arrive months after the pressure on India began:

• 2022: Russia's invasion of Ukraine was followed by Western sanctions and embargoes, pushing Moscow to seek more Asian buyers.
• Mid-2024: India's Russian crude imports reached as much as 1.7 million barrels per day.
• July 2025: Trump announced a new round of tariffs targeting countries buying Russian oil.
• Early to mid-August 2025: Chinese refiners increased Urals purchases and booked at least 15 Russian cargoes as Indian buying slowed.
• October and November 2025: The newly booked Chinese cargoes are scheduled for delivery.

India's retreat creates an immediate sales problem for Russia. Oil previously intended for Indian refineries needs another buyer, while the longer delivery schedule for some Chinese cargoes means that a new order and a completed shipment happen at different times.

China buys cheaper oil through different routes

Chinese refiners moved to secure Russian supplies priced at least $3 per barrel below comparable Middle Eastern crude. That discount gave buyers a reason to consider additional purchases while India was holding back.

Many of the new cargoes will leave Russia's Arctic and Black Sea ports. Those routes usually supply India because of their proximity. China more commonly imports Russian crude through the Far East port of Kozmino, making the new bookings a change in both destination and shipping pattern.

Muyu Xu, a senior crude oil analyst at Kpler, described the commercial opening for Chinese refiners as US pressure on India continued:

Right now is still a very good opportunity, because over in India, Trump is still pressing hard on them. Taking advantage of this opportunity while prices are low, I think more refineries will probably consider buying more, within a week or two.

China's Urals purchases nearly doubled in August compared with the average for the year, reaching about 75,000 barrels per day. Purchases by Chinese refiners had also more than doubled since early August. Even with that growth, the volume remained less than a fifth of India's previous purchases.

Why China cannot replace all of India's demand

Russia gains some relief from Chinese orders, but the figures show the size of the gap. India's Urals purchases fell by about 780,000 barrels per day from their earlier average. China's total August Urals purchases of about 75,000 barrels per day were less than one tenth of that reduction.

The comparison concerns Urals, rather than every grade of Russian oil. It explains why strong percentage growth in Chinese purchases can coexist with a large shortfall for Moscow: doubling a smaller volume still leaves it well below the amount a much larger customer has stopped buying.

Xu warned that China alone could not absorb the volumes at stake if India continued to hold back:

"If India keeps holding off on buying, that's going to be a real problem for Russia—China just can't take on all of India's volume by itself," Xu noted.

Russia's energy relationship with China is also changing beyond crude. Oil shipments have fallen compared with a year earlier, while pipeline gas exports to China have surged. Natural gas is consequently becoming more important in their energy trade, even as Chinese refiners take advantage of discounted oil.

Moscow's exposure is therefore about both price and volume. Discounts help attract buyers, but Russia also needs enough customers to take the oil it wants to sell. A prolonged reduction in Indian buying would leave it facing a potential revenue shortfall.

Why Washington has treated China differently

Trump has threatened secondary sanctions and tariffs of up to 500% on countries buying sanctioned Russian oil. Secondary measures seek to pressure outside buyers or business partners, extending the effect of restrictions beyond Russia itself.

India has faced steep tariffs while China has so far avoided direct penalties over its Russian oil purchases. Asked about that difference in a television interview, Trump suggested that action against Beijing was being delayed.

Broader trade negotiations may help explain the pause, particularly discussions involving rare earth minerals and advanced semiconductors. China holds substantial bargaining power in those areas, while its dominance in rare earths and critical raw materials gives it another means of influencing talks with Washington.

US Treasury Secretary Scott Bessent defended the policy by pointing to China's more diversified oil imports. He described India's rapid increase in Russian purchases as "arbitrage" and profiteering. Arbitrage means taking advantage of price differences between markets, in this case the opportunity created by discounted Russian supplies.

US officials defend pressure as India pushes back

Bessent also warned that purchasers of sanctioned Russian oil could face tariffs, while acknowledging the complexity of US relations with China and the risk that higher duties on Chinese goods could increase prices for American consumers.

"Anyone buying sanctioned Russian oil should be prepared for such tariffs," Bessent warned.

White House trade adviser Peter Navarro accused India of undermining efforts to isolate Russia. He presented the tariffs as a warning to both New Delhi and Moscow. China's embassy in Washington, meanwhile, maintained that Chinese trade with Russia is legal and based on market principles.

India rejected the US measures. Its foreign ministry described them as "unfair, unjustified, and unreasonable," pointing out that other countries, including the US and members of the European Union, continue trading with Russia in various sectors.

Indian officials also argued that Western countries initially encouraged India's purchases to help stabilize global energy markets after the Ukraine conflict diverted traditional supplies to Europe. From New Delhi's perspective, the same buying that helped keep oil moving is now being used to justify penalties against its exporters.

External Affairs Minister S. Jaishankar expressed perplexity over the US decision. He pointed out that India is not the largest buyer of Russian oil and warned that the tariffs could damage years of improving relations between India and the United States.

The disagreement leaves India balancing access to discounted energy against the interests of exporters and its relationship with Washington. Trade experts urged calm and caution, recommending negotiations and advising India to avoid retaliation.

Ukraine diplomacy and wider trade talks shape the dispute

Trump's recent summit with Russian President Vladimir Putin did not produce a ceasefire in Ukraine. The US administration nevertheless continues to connect trade policy with progress on the conflict, using the threat of tariffs and secondary sanctions to try to reduce Russia's energy revenue and bring Moscow to negotiations.

Washington's combination of pressure on India, engagement with Russia and restraint toward China has been described as "peculiar." The approach brings trade bargaining and diplomacy together, with access to the US market used to seek changes in other countries' decisions.

China and the US recently agreed to a pause of 90 days on new tariffs, temporarily easing tensions and raising hopes for a modest trade agreement. Holding back on additional penalties may preserve space for those talks while limiting the risk of higher American consumer prices ahead of the holiday season.

What the shift means for the countries involved

China has diversified its energy imports and trade routes, increased domestic production and prepared for possible sanctions. Those steps give Beijing more options as it buys discounted Russian oil and negotiates with Washington over other parts of the trading relationship.

Chinese refiners have an immediate opportunity to secure cheaper supplies. How long that opportunity lasts depends on US trade policy, negotiations with Beijing, developments in Ukraine and whether Indian buyers return to the market.

India faces a different calculation. Lower spending on Russian crude may reduce one source of friction with Washington, while the tariffs themselves threaten export industries, employment and economic growth. Its refiners must make purchasing decisions as diplomatic pressure changes the commercial attraction of Russian supplies.

Russia faces the possibility of a sustained revenue decline if Indian cutbacks continue. Further US measures against China would put additional pressure on Moscow by targeting the other major Asian customer on which it increasingly depends.

Global oil flows are already adjusting through new cargo bookings, different ports and changing destinations. The next scheduled deliveries identified in the shift are China's October and November cargoes. Whether India's reductions become permanent, and whether Washington extends comparable penalties to China, was still undecided as of August 21.

The US strategy seeks to use economic pressure to influence Russia's war policy. Its immediate effects reach further: Indian exporters face higher barriers, Chinese refiners gain access to discounted barrels, and Russia must find buyers for oil that India previously absorbed.

Key Points

• Chinese refiners booked at least 15 Russian oil cargoes, each carrying 700,000 to 1 million barrels, for October and November delivery.
• India's August Urals shipments fell to about 400,000 barrels per day from an earlier average of 1.18 million.
• US tariffs on Indian exports doubled from 25% to 50%, affecting sectors including textiles, gems, auto parts and seafood.
• China's August Urals purchases reached about 75,000 barrels per day, too little to replace the reduction in Indian demand.
• India rejected the tariffs, while China has so far avoided comparable penalties over Russian oil purchases.
• Russia faces a potential revenue shortfall if Indian buying remains depressed and China cannot absorb the surplus.
• US negotiations with China and diplomacy over Ukraine remain central to the direction of the dispute.