IRGS2+ GS3

New US Law Threatens Tariffs Over Russian Oil Imports

Indian Express·2026-09-19

"New US Law Threatens Tariffs Over Russian Oil Imports"

Prelims Facts

  • •The Countering America's Adversaries Through Sanctions Act (CAATSA) was passed by the US Congress in 2017, targeting Russia, Iran, and North Korea.
  • •India secured a CAATSA waiver for purchasing the S-400 missile defence system from Russia.
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Key Terms

Secondary Sanctions

penalties imposed on third-country entities for dealings with a sanctioned state, even without a direct US link.

CAATSA, 2017

US law authorising sanctions on entities conducting significant transactions with Russia, Iran, or North Korea.

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Study Note

BackgroundCore Concept

Background

The United States has long used sanctions as a tool of foreign policy that reaches beyond its own borders. The Countering America's Adversaries Through Sanctions Act (CAATSA), 2017 is the foundational law in this architecture. It targets Russia, Iran, and North Korea. Its Section 231 mandates sanctions on any entity conducting a significant transaction with Russia's defence or intelligence sectors. India's purchase of the S-400 Triumf air defence system from Russia brought it directly within this provision's reach. The US has so far chosen not to formally invoke CAATSA against India, but the threat has shaped bilateral diplomacy for years.

Russia's invasion of Ukraine expanded this sanctions architecture sharply. The G7 and EU placed a price cap of $60 per barrel on Russian seaborne crude. As European buyers exited the Russian market, Moscow began offering steep discounts. Indian refiners, facing no domestic legal bar, moved quickly to buy this cheaper oil. Russia became India's largest single source of crude within roughly a year of the invasion. This energy relationship sits alongside older ties in defence and civil nuclear cooperation. Any new US law targeting Russian oil buyers therefore touches nuclear, defence, and energy ties together, not energy alone.

India's response to such pressure is rooted in a longer foreign policy tradition. Panchsheel, the Five Principles of Peaceful Coexistence agreed in 1954, established mutual respect for sovereignty and non-interference as the basis of India's engagement with the world. During the Cold War this matured into Non-Alignment. In the current multipolar era it has evolved into what is called strategic autonomy or multi-alignment: engaging the US, Russia, the Gulf states, and others simultaneously, based on issue-by-issue national interest rather than binding alliance commitments.

The Topic Explained

US sanctions generally work through two layers. Primary sanctions bind only US persons and entities. Secondary sanctions go further. They penalise third-country banks, shipping firms, and importing nations even without any direct US link. This extraterritorial reach works because most global oil trade is settled in US dollars. Any bank that wants access to the US financial system has strong reason to comply, even without a formal legal obligation to do so. This dollar-dependence is the real enforcement mechanism behind secondary sanctions.

The newly signed Lindsey O. Graham Sanctioning Russia and Iran Act, 2026 extends this logic from defence deals to energy trade. It is named after the late senator who long pushed for such a law. It cleared the Senate and then the House before being signed into law. Its central feature is a grant of discretionary authority to the US President to impose tariffs of up to 100% on countries that import Russian oil. …

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Related PYQs

2019GS2 Mains

'What introduces friction into the ties between India and the United States is that Washington is still unable to find for India a position in its global strategy, which would satisfy India's national self-esteem and ambitions.' Explain with suitable examples.

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2018GS2 Mains

In what ways would the ongoing US-Iran Nuclear Pact Controversy affect the national interest of India? How should India respond to this situation?

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2025GS2 Mains

"Energy security constitutes the dominant kingpin of India's foreign policy, and is linked with India's overarching influence in Middle Eastern countries." How would you integrate energy security with India's foreign policy trajectories in the coming years?

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Practice MCQs

IRmedium

Which of the following statements about the Sanctioning Russia and Iran Bill (informally the 'Graham Bill') is correct?

AIt bans all crude oil imports by the United States
BIt empowers the White House to impose tariffs of up to 100 per cent on countries importing Russian oil
CIt is administered exclusively by the World Trade Organization
DIt applies only to European Union member states
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IReasy

The 'CAATSA waiver' granted to India in the context of its defence procurement was specifically related to India's purchase of which system?

ARafale fighter jets from France
BS-400 missile defence system from Russia
CIron Dome from Israel
DTHAAD system from the United States
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IRmedium

Consider the following statements regarding the Countering America's Adversaries Through Sanctions Act (CAATSA):

1.It was enacted by the US Congress in 2017.

2.It targets Russia, Iran, and North Korea.

3.It allows only primary sanctions against US persons dealing with these countries.

How many of the above statements are correct?

AOnly one
BOnly two
CAll three
DNone
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IRhard

Consider the following pairs of sanctions-related instruments and their primary target:

1.CAATSA (2017) — Russia, Iran, North Korea

2.Executive Order 13846 — Iranian petroleum transactions

3.JCPOA (2015) — Nuclear non-proliferation with Iran

4.Graham Bill — Countries importing Russian oil

How many of the above pairs are correctly matched?

AOnly one pair
BOnly two pairs
COnly three pairs
DAll four pairs
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IRmedium

Which of the following best explains why US secondary sanctions have significant coercive power over third countries like India, even without a direct legal obligation to comply?

AThird countries fear direct military retaliation from the United States
BCompliance with UN Security Council resolutions makes such sanctions automatically binding
CDependence on the US dollar-based global financial system risks exclusion from it for non-compliant entities
DThe World Trade Organization mandates compliance with all US sanctions laws
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