Trump's 50% tariffs on India over Russian oil purchases take effect

[Melon]

6. Why? Why would oil prices skyrocket over night?

Russia has limited outlets for Oil right now. They are selling at a 30%+ discount primarily to China, India, and Turkey. India is consuming the oil but moreover washing it through their tanks and selling it back into the market where it goes to EU.b You are talking a ~2.5MM barrel reduction a day. OPEC has cut over 5MM barrels a day in reduction to support oil pricing in 2025. They could easily increase production by 2.5MM.

Oil is oversupplied right now. This is why OPEC cuts are not causing oil to skyrocket. India buying the oil is funding the Russian war. I'm not sure why we would support that. Without oil revenue, Russia's war machine will collapse.

India is also repackaging Russian Chemicals and re-selling those into the market. India is showing loyalty only to money and to itself.

Russian oil is also helping to fuel trade imbalances that are causing the issues leading to tariffs. Both India and China should have a hard time competing with any Chemistry that is Ethylene based. Plastics like polyethylene etc should also be advantaged to the US, but those buying Russian oil are buying at a large discount. That product is flooding markets at low prices as China tries to keep its factories running and people employed.

Cutting Russia off from Oil funds supports Ukraine and needs to happen. I am not a fan of all the tariffs, but if any of them can make sense it is this one.