Graham Act Waiver: Trump Sets Aside 100% Russian Oil Duty

🗞️ Why in News US President Donald Trump, by an executive order dated 16 October 2026 and reported in India on 17 October, used Section 115 of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 to waive the duties provided for in the Act’s Sections 112 and 113 and in the order. They included a 100 percent duty on goods from the largest 5 importers of Russian crude oil and natural gas that make new purchases on or after 18 October 2026. India, which The Indian Express counts among the top buyers of Russian oil, is spared that threat for now: the waiver lasts until Washington decides that “further action is appropriate”.

The Waiver at a Glance

Background from earlier coverage:

• the Act and its tariff threat (22 September roundup);
• India raising it with a US Congressional delegation (28 September);
• the Indian Express editorial of 12 October on the law and the trade deal.

What the Order Sets Out: Three Duties

The order first lays down the duties it sets under the Act (a Congressional Research Service analysis of the bill describes rates of “up to 500 percent” and “up to 100 percent”), each “subject to the exceptions set forth in section 114 of the Graham Act and the waivers issued in section 4 of this order”:

These duties “shall apply in addition to any other duty, fee, tax, exaction, or charge”, including duties under Section 301 of the Trade Act and Section 232 of the Trade Expansion Act.

Know the terms. An ad valorem duty is charged as a percentage of the value of the goods. The second and third duties work as secondary tariffs: they fall on a third country’s goods because of its dealings with a sanctioned country, not on Russia’s own goods.

How the Waiver Works

The power. “Section 115 of the Graham Act authorizes the President to waive the application of any sanctions provision ... and any duty under the Graham Act, subject to the submission to the Congress of a written certification that such a waiver is in the national interests of the United States and a report explaining the basis for the certification.” The waiver is a presidential power, but one that must be justified to Congress in writing.

Set out and waived in one order. Having laid down the duties, the same order, in its Section 4, waives “any duties provided for in sections 112 and 113 of the Graham Act or this order”, and then the sanctions provisions listed above. For each waiver it records that a certification and report have gone to Congress.

Watched, and revocable. The waivers last until the President or the Secretary of State “determine that further action is appropriate”. The Trade Representative “shall promptly inform the President of any circumstance that, in his opinion, might indicate the need for further action by the President, including with respect to the waivers.” The order also delegates the Section 115 power to the Secretary of State, in consultation with the Treasury Secretary and the Trade Representative.

What the waiver is not

• Not a repeal. The Act stays on the books; only the application of its duties and listed sanctions is waived.
• Not a lifting of Russia sanctions. The order says that “nothing in this order affects any sanctions or other measures” under the executive orders issued for the national emergency on Russia, continued on 24 March 2026.
• Not the diesel relief. That came separately, through the US Treasury’s Office of Foreign Assets Control (OFAC) General License 135, dated 9 October 2026. It covers diesel only, runs until 12:01 a.m. eastern daylight time on 7 April 2027, and does not authorise any debit to an account of the Russian central bank, the National Wealth Fund or the Ministry of Finance held on the books of a US financial institution (our 11 October analysis).
• Not a duty India ever paid. The 100 percent duty applied only to new purchases on or after 18 October 2026, and the order waived it before that date.

Why It Matters for India

The exposure. India “is the world’s third-largest consumer of crude oil and depends on imports to meet over 88% of its crude oil needs, and Russia is its largest supplier”, according to The Indian Express. In September 2026, India imported 1.9 million barrels per day of Russian crude, over 35% of its total oil imports for the month, according to tanker data from the analytics firm Kpler cited by the paper; the all-time high was 2.8 million barrels per day in July. The Indian Express describes the Act as giving the President powers to impose 100% tariffs “on top buyers of Russian oil, including China and India.”

India’s position. When the Act was signed in September, the Ministry of External Affairs said the government remained committed to the nation’s energy security “through diversified sourcing and based on evolving market dynamics”. Finance Minister Nirmala Sitharaman had said, The Hindu reports, that India could not stop buying Russian oil, as doing so could raise global oil prices and alternative sources were limited.

What comes next. Secretary of State Marco Rubio is scheduled to visit Mumbai and Jamnagar from 20 to 22 October, when he will meet External Affairs Minister S. Jaishankar. The Indian Express sees the waiver as possibly bringing an India-US trade deal closer; that is a prospect, not an outcome.

The US Side: Prices, Diesel and Politics

The Indian Express’s reading. The paper links the move to crude prices “surging past $110 a barrel” and US midterm elections “less than a month away”. For context, it reports, citing the Council on Foreign Relations, that diesel prices in the US averaged $6.18 a gallon as of 12 October, up from $3.48 at the start of the year, and that US consumer prices rose 0.6% in September, an annual 3.7%.

The diesel deal. As The Hindu reports President Trump’s account, Russia would “immediately” supply over 3,00,000 tonnes of diesel to the US and the global market, another 5,00,000 tonnes in November and 1 million tonnes “immediately thereafter”. The Hindu adds that leaders “on both sides of the political spectrum” say the deal undermines the law; Republican Michael McCaul of Texas wrote: “I am concerned the lifting of sanctions on Russian oil will only fund the Kremlin’s war machine ...”.

Significance and Issues: The Mains Angle

1. Relief, not certainty. The waiver is open-ended and can end whenever the President or the Secretary of State decides “further action is appropriate”, while the Trade Representative keeps watch.
2. Secondary tariffs as a lever. A duty tied to a third country’s energy purchases makes market access to the US depend on whom India buys oil from, which tests India’s strategic autonomy.
3. Energy security first. With imports meeting over 88% of crude needs and Russia the largest supplier, a sudden switch would be costly, as the Finance Minister’s remark on prices and limited alternatives makes clear.
4. Domestic politics set the timing. On the Indian Express’s reading, US fuel prices and the midterm calendar, not a change in India’s conduct, drove the waiver.
5. A check, not a blank cheque. The certification and report to Congress mean the President must justify each waiver in writing.

Way Forward

• Keep sourcing diversified, so that a reversal of the waiver does not become a supply shock.
• Use the diplomatic calendar, starting with the Rubio visit scheduled for 20 to 22 October and the trade talks, to seek predictability for Indian exporters.
• Prepare for reversal: track the Trade Representative’s monitoring and any new US determination.
• Hold the line on principle: energy purchases decided by India’s national interest, as the government has stated.

UPSC Relevance

• GS Paper 2: Effect of policies and politics of developed countries on India’s interests; bilateral relations (India-US, India-Russia).
• GS Paper 3: Infrastructure: energy; Indian economy and external trade.
• Prelims: Graham Act (signed 18 September 2026), Section 115 waiver, the 500% and 100% duties, the 18 October 2026 trigger, OFAC General License 135, Section 301 and Section 232.
• Mains practice question: “The US waiver of Graham Act duties gives India relief, not certainty. Discuss how India should balance its energy security with its trade ties with the United States.” (GS2, 250 words)

📌 Facts Corner, Knowledgepedia

Prelims, statement-ready facts:

• Lindsey O. Graham Sanctioning Russia and Iran Act of 2026: signed into law on 18 September 2026.
• Waiver by executive order dated 16 October 2026, under Section 115(a), with a certification and report to Congress.
• Duties set out: +500% on goods from Russia; +100% on the largest 5 importers of Russian crude and gas; +100% on top 5 facilitators.
• The importers’ duty applied only to new purchases on or after 18 October 2026.
• Sanctions waived, as listed in the order: Sections 102(a), 102(d), 102(e), 103 to 111 and 117; earlier executive-order sanctions on Russia unaffected.
• OFAC General License 135: dated 9 October 2026, diesel only, valid until 7 April 2027.
• India’s Russian crude in September 2026: 1.9 million bpd, over 35% of oil imports (Kpler, cited by IE).

Prelims, the traps:

• Trap: the order is dated 16 October 2026, not 17 October; it was reported in India on 17 October.
• Trap: the waiver did not lift US sanctions on Russia; sanctions under earlier executive orders are expressly unaffected.
• Trap: no 100% duty was ever imposed on India; it was waived before the 18 October 2026 trigger date.
• Trap: “largest 5 importers” and “top 5 facilitators” are two separate lists, each with its own 100% duty.

Mains, arguments and keywords:

• Relief, not certainty: the waiver lasts only until the President or the Secretary of State decides “further action is appropriate”.
• Keywords: secondary tariffs, energy security, strategic autonomy, diversified sourcing, national interest waiver.
• Way forward: diversified sourcing, use of the Rubio visit and trade talks for predictability, readiness for a reversal.

Interview, be ready for:

• “Should India stop buying Russian oil to secure a US trade deal?” Answer: energy security comes first; India’s stated line is “diversified sourcing” based on market dynamics.

Revision Flowchart

Sources: The White House, executive order “Implementing the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026”, dated 16 October 2026 (text); The Hindu, 18 October 2026, Saptaparno Ghosh and Suhasini Haidar; The Hindu, 18 October 2026, T.C.A. Sharad Raghavan (FAQ on the US-Russia diesel deal); The Indian Express, Explained, 17 October 2026, and 18 October 2026, Ravi Dutta Mishra and Sukalp Sharma; US Treasury, OFAC General License 135 (text).

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