LONDON, July 10 — Against the backdrop of escalating trade tensions between Washington and Moscow, the global oil market is once again bracing for a potential supply shock. The proposed United States tariffs on Russian crude oil, while modest in direct volume terms, have sent a signal through the corridors of the International Energy Agency that the era of cheap Russian barrels may be drawing to a close. The numbers tell a story of dramatic transformation.
In 2021, the United States imported 672,000 barrels per day of Russian crude. By 2024, that figure had collapsed to roughly 70,000 barrels per day — a consequence of the self-sanctioning by Western buyers after the invasion of Ukraine and the subsequent imposition of the G7 price cap mechanism.
The direct impact on American refineries from the proposed tariffs is therefore limited. Yet what is at stake is far larger than the direct trade between the two countries. Russia remains a titan of global oil production.
In 2024, the country produced approximately 10.5 million barrels per day, accounting for roughly 11 percent of the world’s total output. That is a volume that, if disrupted, would be felt across every importing nation.
The proposed U.S. tariffs, analysts say, could reduce the amount of Russian oil available on the open market, further tightening a global supply picture that has already been strained by geopolitical instability. The price of Brent crude, the global benchmark, averaged $82 per barrel in 2024. That is a level that, while uncomfortable for many importing economies, has not yet triggered the kind of demand destruction seen during previous spikes.
The wider picture, however, is one of mounting risk. Analysts at the International Energy Agency have warned that any significant disruption to Russian oil exports could push prices above $100 per barrel. Such a move would have profound consequences for European economies still grappling with the aftermath of the energy crisis set off by the war in Ukraine.
The proposed tariffs also raise a deeper question about the effectiveness of the existing price cap mechanism. Set at $60 per barrel, the cap was designed to allow Russian oil to flow to global markets while denying Moscow the windfall revenues it uses to fund its war machine.
In practice, the mechanism has been criticised for allowing Russia to sell its oil above the cap, using a shadow fleet of tankers and opaque trading intermediaries. The new tariff proposal signals a broader U.S. effort to tighten these enforcement loopholes, a move that could also provoke a retaliatory response from Moscow. The United States is the world’s largest oil producer, with output reaching 13.2 million barrels per day in 2024.
That domestic production provides a significant buffer against price spikes, but it does not insulate the American economy entirely. U.S. refiners, particularly those along the Gulf Coast, have already expressed concern about the tariff proposal.
They rely on imports of heavy crude from Russia and other countries to feed complex refineries that are optimised for processing such grades. A sudden reduction in those imports, combined with the tariffs, could squeeze margins and push up fuel costs for American consumers. The coming weeks will be critical.
The tariff proposal, still at the stage of a formal announcement, must now navigate the corridors of Washington’s interagency review process. European capitals are watching closely. The wider picture is one of an oil market that has learned to live with disruption but that has not yet priced in the full consequences of a permanent rupture between Russian supply and Western demand.
For now, the benchmark hovers near $82, but the risk of a spike above $100 has never felt more tangible.
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