Speaking to CNBC-TV18, Rick Joswick, Head of Global Oil Analytics at S&P Global Platts, cautioned against overestimating the market impact of proposed US sanctions. “We’ve seen a lot of sanctions plans that have been implemented that have had only a moderate effect on global oil balances,” he said, adding that Washington’s overriding objective has consistently been to keep oil prices restrained.
That market reality is visible in the data. Global crude inventories surged by about 400 million barrels last year, with large stock builds in China and significant volumes sitting in floating storage. Joswick expects another 200 million barrels or more to be added to inventories through May this year, reinforcing a surplus environment. Against this backdrop, oil prices have been on a steady downward glide path—from around $80 per barrel two years ago to near $60 now.
“Our expectation is a shallow, soft landing of around $55 to $60 for dated Brent,” Joswick said, arguing that isolated geopolitical disruptions—such as tanker seizures or US moves on Venezuelan oil—are “very small” in the context of global supply-demand balances.
Sanctions talk, but limits to enforcement
The sharpest political signal has come from a proposed US bill that would allow the President to impose tariffs of up to 500% on imports from countries buying Russian oil. Former Indian Ambassador to the WTO Jayant Dasgupta said the headline number grabs attention, but the economics tell a different story.
“Once tariffs reach those levels, whether it is 500%, 300%, or even 150% is immaterial. Trade effectively ends much earlier,” Dasgupta said. Such a move would, in effect, shut down goods trade between the US and major economies like India or China—an outcome he described as unlikely in practice.
Both Dasgupta and Joswick stressed that a complete shutdown of Russian oil exports would be counterproductive for the US itself. Russia remains one of the world’s largest crude exporters, with India importing over a million barrels per day and China even more. “The world would find it difficult to balance supply and demand without Russian oil,” Joswick said, adding that keeping Russian barrels in the system helps cap global prices.
As a result, analysts expect any sanctions to remain selective—targeting specific entities or shipping arrangements rather than all Russian oil flows. India, for its part, is likely to continue sourcing crude from non-sanctioned Russian suppliers while quietly diversifying options.
Venezuela and the heavy crude angle
Another piece of the puzzle is Venezuela. While US Energy Secretary Chris Wright has argued that allowing Venezuelan oil to flow—under US oversight—could eventually lift production by a few hundred thousand barrels per day, Joswick said the broader price impact would be modest.
However, he highlighted a nuance that matters for India. Venezuelan crude is predominantly heavy oil, accounting for a meaningful share of global heavy crude exports. “An increase of 200,000 to 300,000 barrels per day from Venezuela would push heavy oil prices lower,” he said, noting that this could improve refining margins for complex refineries capable of processing heavier blends.
India may no longer be buying Venezuelan crude directly, but many Indian refineries are configured to run heavy and sour grades. Lower heavy crude prices can ripple through the market, indirectly benefiting Indian refiners’ economics even as headline Brent prices soften.
India’s strategic calculus
For India, the challenge is balancing energy security with geopolitical risk. Russian oil imports have already eased marginally in 2025, down about 4% year-on-year, but remain a critical part of the crude basket. Dasgupta said New Delhi is unlikely to formalise any policy that acknowledges the legitimacy of unilateral US sanctions, which it views as inconsistent with international law.
Instead, India is expected to hedge—continuing to buy discounted Russian barrels where permissible, while preparing alternative supply lines should sanctions widen. Heavy crude availability, including potential incremental Venezuelan supply, could offer additional flexibility for Indian refiners.
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Soft prices, firm fundamentals
Ultimately, both experts see market fundamentals overpowering political noise. With inventories rising, incremental supply possible from Venezuela, and strong incentives for the US to avoid spiking prices, oil appears set for a period of relative calm rather than shock.
“If prices stay in the $55–$60 range, US shale production remains viable,” Dasgupta noted, adding that a sharper price fall could itself trigger policy recalibration in Washington.
For now, the message is clear: sanctions rhetoric may dominate headlines, but market reality—ample supply, soft prices, and strategic interdependence—continues to shape outcomes. For Indian refiners, that reality could translate into steadier input costs and improved margins, even in an increasingly fractured geopolitical landscape.
Watch accompanying video for entire discussion.
