Why this Trump oil tariff is Zzz

A bill passed by overwhelming majority in the US Senate to impose 100% tariffs on the top 5 buyers of Russian oil doesn't pose an immediate disruption to India's energy supplies. The bill is still some way from becoming law, and New Delhi has ramped up its diplomatic initiatives since Russia's war on Ukraine to diversify its oil and gas imports. India now imports oil from a wider basket of oil-producing nations and has adequate buying heft to scale up purchases from alternative sources. Traditional suppliers in West Asia will find it easier to fulfil short-haul tanker deliveries to India as they emerge from a prolonged closure of the Hormuz Strait. Long-term buying commitments from India can help seed investments in energy infrastructure by smaller oil-producing nations in Africa and South America. The share of Russian supplies in India's oil imports grew at breakneck pace. This provides some indication how rapidly these can be dialled down.

The US, however, will face a far more complex situation in ensuring global oil prices don't surge on account of its additional weaponisation. Sanctions, aimed at the top 5 importers, will allow Russian oil to flow to smaller buyers. Opec has been struggling to enforce production quotas, and the UAE's withdrawal from the oil-producing cartel highlights rising conflicts with national interest. Conflicts like those in West Asia and Europe, and ensuing sanctions, contribute to divergence of investment from production capacity in Opec states. Trump will have to use the extra strategic muscle provided in the bill with caution.

He's already facing a pushback from Nato allies over disrupting oil trade. Those effects could magnify if China and India were to draw from the same oil well as Europe. Trump has used tariffs against India and threats against China for buying Russian oil even before Congress gave him the authority. Tariffs against India were withdrawn, and the threat to China was not acted upon. A piece of paper allowing the action should not change the situation on the ground.