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America punished India for buying Russian oil. Then it bought Russian diesel.
Trump's diesel deal with Putin, the sanctions it paused, and why India is watching closely.
For a year, Washington told New Delhi one thing: stop buying Russian oil. On 9 October 2026, President Trump announced the US would buy Russian diesel instead.
How India got squeezed
In August 2025 the US put a 25% reciprocal tariff on Indian goods, then added another 25% as a penalty for buying Russian crude. That took the total to 50%. In February 2026, India agreed to stop buying Russian crude, and the US said it would cut the tariff to 18%.
Then on 18 September 2026, Trump signed a new sanctions law. It directs tariffs of up to 100% on the top five importers of Russian oil or gas, which puts India back in the line of fire.
The phone call
Three weeks later, after a call with Vladimir Putin, Trump said Russia would supply:
The US Treasury issued a licence so that sanctions won't apply until April 2027 to Russian diesel loaded onto tankers as of that day. It's the first diesel licence longer than the usual 30 days since the Ukraine war began in 2022.
Why Trump did it
- $6.52Record US national average for diesel per AAA, on 22 September 2026. It was $6.28 on 9 October.
- MidtermsTrump said lower fuel prices for truckers, farmers and ranchers were his top priority, with midterm elections weeks away.
- RussiaMoscow had restricted diesel exports in July after Ukrainian attacks on its refineries. It said it would lift those limits early.
The reaction
Ukraine's President Zelenskyy called it "a weak decision by strong partners." US Democrats including Chuck Schumer and Elizabeth Warren called it a betrayal of Ukraine. Analysts disagreed on whether it would bring prices down much at all.
The same law that threatens India with up to 100% tariffs is still on the books. Watch for which five countries the US Trade Representative names, and whether India's February deal protects it.
- AP: Trump says US to get diesel from Russia (9 Oct 2026)
- Business Today: India faces fresh US tariff threat over Russian oil
- Breakwave Advisors: India drops Russian crude, secures US tariff relief
- Fox Business: US diesel hits record high
Educational content only. Not investment advice. Spotted an error? Tell us.
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