President Donald Trump's warning to impose financial sanctions on Russia has brought attention to India and China, the two biggest buyers of Russian crude, but the market has so far not shown major concern.

India has become a major buyer of Russian oil after the Ukraine war began in early 2022. This year, Russian oil has made up more than one-third of India’s total crude imports, compared to under one per cent before the conflict, according to data from Kpler. China’s imports have also steadily increased during this time.

Despite this, the market’s first response to Trump’s statements was calm. On Monday, Brent crude, the global oil benchmark, dropped nearly 2 per cent and closed below 70 dollars per barrel, suggesting that oil traders are not expecting major supply disruptions.

Trump said the penalties would include "secondary tariffs" but did not explain what those would involve and added that they would be introduced in 50 days if Russia does not stop the war in Ukraine.

Matt Whitaker, the US ambassador to NATO, said this move would effectively place sanctions on countries that keep buying Russian oil.

He specifically named India and China during his statement.

In June, India imported 2.1 million barrels of Russian oil per day, which was the highest monthly figure in almost a year and close to the record level seen in May 2023, as per Kpler data. While China’s oil imports have not risen as sharply, they have stayed above 1 million barrels a day consistently since the war began.

"If push comes to shove, and India is not able to purchase any crude oil from the Russian system, then India has optionality with the other members of OPEC," said Mukesh Sahdev, who heads commodity markets at Rystad Energy A/S. But "it will be at a higher cost," he said.

Oil from the Middle East and Africa could help cover the shortfall if the Russian supply is cut off, but it would be more costly.

According to the Indian Ministry of Commerce and Industry, oil imports from Saudi Arabia in May were 5 dollars more expensive per barrel than oil from Russia, while crude from Iraq cost about 50 cents more.