Trump Exempts Russian Energy Purchases from Graham Act’s 100% Tariffs

Key Facts

U.S. President Donald Trump signed Executive Order 14436 on October 16, exempting the application of tariffs provided for under the Graham Act, in a move that eases the immediate risk for countries that buy Russian oil and gas, including India. Trump said in the order that he had signed the Graham Act on September 18 and submitted a certification to Congress stating that the exemption serves the U.S. national interest. The decision comes as Washington and New Delhi seek to reach a trade agreement, with India’s purchases of Russian oil a point of tension between the two countries. The exemption covers tariffs under Sections 112 and 113 of the act, and its text is not limited to India’s purchases of Russian energy. U.S. Secretary of State Marco Rubio said Washington was trying to complete a trade deal with India and that the two sides were “very close” to reaching one.

The Graham Act threatened the top 5 importers of Russian oil and gas with a 100% increase in tariffs on goods if they made new purchases starting October 18, subject to exceptions and exemptions. The order also provided for a 500% increase in tariffs on goods from Russia, subject to the exceptions set out in it. By exempting the application of the relevant tariffs, Trump halted the immediate threat that had been imminent when he signed the order. But the decision does not end the monitoring process: the U.S. Trade Representative was tasked with monitoring purchases of Russian oil and gas and reporting developments to the president. The representative must also promptly notify the president if they believe further action is needed, including in relation to exemptions.

The move is significant for India, the world’s third-largest oil importer and consumer, after Russian oil accounted for nearly half of its imports earlier in the year. India’s imports from Russia had already fallen 16.5% in August to about 2.1 million barrels per day from July, while Russia remained the country’s largest supplier. Kpler data forecast imports would fall to about 1.75 million barrels per day in September, their lowest level since April. The decline came amid tight Russian supplies and intensifying Chinese competition for cargoes. Indian refiners turned to higher-cost alternatives from the UAE, Iraq and Angola, according to traders cited by Reuters.

India had faced the prospect of higher energy costs if it cut Russian purchases to avoid U.S. tariffs; Reuters warned that sustained reductions could push fuel prices higher or strain the Indian government’s finances. Prime Minister Narendra Modi’s administration also warned the previous month that the new tariffs could harm bilateral relations. Trade negotiations between Washington and New Delhi had stalled for months, partly because of disagreements over tariffs and purchases of Russian oil. On October 15, India’s commerce minister said the first phase of the agreement had been completed and was in legal drafting. In Mumbai on October 20, Rubio said the sides were “very close” and “as close as possible without signing the agreement,” while India’s foreign minister said the talks covered trade, energy, technology and defense.

Indian trade data showed a surge in exports to the United States in September, but it came amid the tariff threat and does not prove that the exemption caused it. Exports rose 48% year over year to $8.02 billion, compared with $5.42 billion in September 2025, when they had fallen 12.58% year over year. The Financial Express attributed part of the increase to shipments being brought forward ahead of the tariffs and to a low comparison base. From April to September 2026, Indian exports to the United States totaled $50.81 billion, up 11.11% from the corresponding period. September’s reading therefore forms part of a broader trade trend, at a time when the trade agreement had not yet been signed.

The exemption announcement was reflected in oil markets during October sessions, with prices retreating after rising. On October 19, Brent crude fell $1.06, or 0.96%, to $108.80 a barrel, while West Texas Intermediate declined 23 cents, or 0.23%, to $101.18. In the following session, Brent slipped 49 cents, or 0.45%, to $109.06, after reaching $110.70 in the previous session, its highest level since May 20. Russian supplies remained a factor in the market backdrop: Russia’s crude output rose by 65,000 barrels per day in September to 8.43 million barrels per day. But it remained about 870,000 barrels per day below its level a year earlier, according to an International Energy Agency official.

Implementation of the exemption remains tied to U.S. administration monitoring of purchases and activities, as the order allows the president or secretary of state to determine whether further action is needed. On the trade track, India’s commerce minister announced on October 15 that the first phase of the agreement had entered legal drafting, while Rubio described the deal on October 20 as very close. Neither statement gave a signing date, while tariffs and Russian oil purchases remained among the issues that had affected negotiations. The Associated Press said Washington reduced tariffs on most Indian goods from 50% to 18% under a framework agreed in February, after imposing tariffs of up to 50% in August 2025. The executive order leaves the monitoring process open alongside the trade negotiations.