On Sept. 18, President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026. It lets the US put tariffs of up to 100%, on top of other applicable duties, on goods from countries that rank among the largest buyers of Russian oil or natural gas, or that are named as major facilitators of sanctions evasion. The aim is to make Russian energy more expensive to buy.
The catch, according to supply chain researcher Manikandan Chandran, is who pays. Writing in SupplyChainBrain, he argued that if the tariffs land on economies as large as China or India, the effects will not stay inside the oil market.
Oil first
The exposure is large. In 2025 the US imported approximately $308.7 billion in goods from China and $103.8 billion from India, more than $400 billion a year that could be affected directly or indirectly.
The oil market would move first. India’s Russian oil imports fell about 16.5% in August to roughly 2.1 million barrels per day, Reuters reported, with preliminary September volumes around 1.9 million. Chinese refiners kept buying, and in September their demand helped push ESPO Blend prices above $120 per barrel as Middle East disruptions tightened supply, Reuters said.
If big buyers cut back, refiners must find crude in the Middle East, Africa, Latin America or the US. Every switch changes voyage distances, tanker needs, port calls, insurance and freight costs. Shipping is already under strain, with the cost of moving crude on some very large crude carriers above $30 per barrel.
Then the factory floor
Chandran’s second point concerns goods that have nothing to do with oil. China supplies US businesses with electronics, machinery, industrial components, chemicals and consumer products. India plays a growing part in pharmaceuticals, chemicals, engineering products, electronics and textiles. If either becomes much costlier, importers can absorb the increase, pass it on or switch suppliers.
Switching is slow. Qualifying a new supplier can take months of tooling changes, testing, quality approval and contract talks, and more in regulated fields such as pharmaceuticals, medical devices and aerospace. A replacement may exist but not at the volume, price, quality or delivery schedule a buyer needs.
Companies also act before tariffs arrive. They pull imports forward, build inventory, reserve shipping space and look for suppliers in countries they think will be spared. Each decision makes sense alone. Thousands at once send more orders to alternative factories, fill ocean bookings and warehouses, stretch lead times and lift prices. Chandran said earlier tariff changes did the same: they shifted when goods moved, where from, and how much stock firms were willing to hold.
The pressures stack. A US company buying components from China with a backup in India gains little if both face pressure over Russian energy. Moving to Vietnam, Mexico or elsewhere in Southeast Asia may not help either, since a product assembled there can still rely on Chinese components, Indian chemicals or Russian-origin energy. Chandran’s advice is to look past the Tier 1 supplier, map where critical parts originate, and stress-test supply chains against several shocks at once. Strategic inventory suits some products; dual or regional sourcing suits others.
He did not predict disruption. The law leaves wide room in how tariffs are applied, and countries may cut Russian purchases or negotiate exemptions first. Supporters argue that curbing the value of Russian energy exports adds pressure on Moscow and discourages sanctions evasion.
