Tariffs slashed by 60%, Russia abandoned—has Trump successfully courted India?

When Trump formally proposed a cumulative 50% tariff on August 6 last year, the MSCI India Index subsequently significantly underperformed global equities—lagging the S&P 500 by 10% and the CSI 300 by 15% over five months. Once tariff pressure eased, valuation headwinds facing India’s IT, pharmaceutical, and high-end manufacturing sectors could lift. With foreign capital returning, Indian valuations may rebound toward their historical median. Currently, the Bombay Sensex 30 trades at a P/E of 22.5x—placing it at the 23.5th percentile over the past five years, i.e., 5% below its median. In contrast, the S&P 500 sits at the 88.5th percentile—13% above its median. India’s index earnings growth has long been highly predictable (historically exceeding 10% annually), but over the past year, mass foreign investor exodus—compounded by high tariffs—weighed on corporate earnings (EPS grew only ~4% year-on-year), triggering a classic ‘double whammy’—a simultaneous decline in both earnings and valuation multiples. This tariff relief now paves the way for renewed foreign inflows, lifting Indian valuations. Markets reacted swiftly: today, the Nifty India 30 Index rose 2.6%, while India-focused ETFs—including the India LOF and Emerging Asia ETF—traded at premiums. ……… Of course, this rapprochement between the two leaders deals the hardest blow to Russia. This move could sever a major source of Putin’s war financing, further crippling Russian oil revenues—and potentially reshaping the current geopolitical landscape. Previously, Russia sold most of its oil to China and India—giving those two buyers modest bargaining power. Now that India—the largest buyer—has walked away, Russia’s oil exports become even more dependent on China. If Beijing then says, “Since you’ve got nowhere else to sell, how about another discount?” Russia would be placed in an extremely vulnerable position. That said, although state-owned Indian enterprises are now barred from buying Russian oil under the new agreement, private firms may still quietly procure it—e.g., Reliance Industries, a private refiner whose crude is mainly processed and re-exported to Europe and the U.S. To remain profitable, Reliance may continue sourcing Russian oil via shadow fleets. Trump, however, anticipated this. Within the trade deal, he offered India access to Venezuelan oil—legally and transparently. With Maduro ousted, Chevron retains lawful operating rights in Venezuela and can supply oil directly. Moreover, since U.S. shale oil is light crude—but India primarily needs low-cost diesel (requiring blending with heavier crudes)—Trump also stipulated that India must purchase Venezuelan heavy crude alongside light crude. Thus, the U.S. neatly bundles both light and heavy supplies—a shrewd strategic calculation. In short, investors who grasp this closed-loop logic will understand why Trump and Modi spent over half a year in tough negotiations before finally reaching agreement. Trump sought India’s full decoupling from Russia, increased purchases of U.S. goods, dismantling of trade barriers, and reduction of the bilateral trade deficit—aiming for genuine mutual benefit, rather than letting India exploit its Asia-Pacific balancing role to reap unilateral advantages. Modi, meanwhile, wanted U.S. tariff relief—but wished to preserve domestic industry protections and continue leveraging cheap Russian oil to fuel India’s economic development.

What does Venezuela’s rapidly recovering oil production reveal about the petrodollar system?

Moreover, according to tanker monitoring data, Venezuela’s state-owned oil company PDVSA experienced minor delays at its export terminals in June due to two fatal earthquakes. As a result, Venezuela’s oil exports declined slightly in June 2026—to 1.2 million barrels per day (bpd), down from 1.25 million bpd in May. Of this, crude shipments to the United States rose to 630,000 bpd, while exports to India fell to 277,000 bpd. That month, Chevron’s Venezuelan crude exports increased to approximately 293,000 bpd, while commodity traders—including Vitol and Trafigura—exported roughly 775,000 bpd collectively. Global refiners are bypassing intermediaries to buy Venezuelan crude directly. Alongside rapid output and export recovery, Venezuela’s oil export policy is undergoing transformation: PDVSA is now selling crude directly to end-user refiners, thereby capturing higher margins. Industry expert Alex Kimani detailed this shift in an article published on July 22, 2026, on OilPrice.com. Kimani noted that companies including Phillips 66, Reliance Industries, Chevron, Repsol, and Eni have signed direct crude supply agreements with PDVSA—diminishing the role of traders like Vitol and Trafigura. By selling directly to refineries and joint-venture partners, Venezuela secures higher effective prices and simultaneously reshapes global crude trade flows and the refining economics along the U.S. Gulf Coast. According to Reuters, commodity traders are suffering unprecedented losses as refiners bypass oil intermediaries to source Venezuelan crude directly. Refineries and major oil producers are rapidly signing direct supply contracts with PDVSA—exiting the traditional trading ecosystem dominated by Vitol and Trafigura—to quickly capture market share in Venezuelan crude. Six months after the reopening of Venezuela’s oil market, Phillips 66 and India’s Reliance Industries have already signed direct supply agreements; Valero and Thailand’s Tipco—the country’s largest asphalt producer—are expected to follow suit shortly. Previously, Vitol and Trafigura held dominant positions in Venezuelan crude marketing, thanks to exclusive U.S. government licenses, mature logistics infrastructure, and longstanding ties with PDVSA. Following Venezuela’s major political shift in January 2026, the U.S. government brokered a deal to assume control and oversee the sale of the country’s oil resources. The U.S. Treasury granted Vitol and Trafigura special long-term licenses—valid until June 2027—conferring temporary monopoly rights. Within just six months, the two firms jointly exported over 100 million barrels of crude, while other global players were legally barred from participating. Their unparalleled logistical capabilities further cemented Vitol’s and Trafigura’s competitive edge. After all, global trading houses possess ample tanker capacity and extensive geographic reach—enabling them to rapidly deploy vessels and reroute large volumes of crude. During market stress, they can leverage floating storage facilities—such as those in Malaysia—to stage bulk shipments, absorbing substantial warehousing and transportation costs.

US Eyes India’s Reliance to Refine Venezuelan Oil

1 day ago

US Secretary of State Marco Rubio urged Reliance Industries to refine more Venezuelan crude during his India visit, aiming to stabilize energy markets amid regional conflicts and diversify supply chains.

bloomberg

2026-10-20

US Eyes India’s Reliance to Refine Venezuelan Oil

US Eyes India’s Reliance to Refine Venezuelan Oil

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