By: Shatha Kalel
The world is currently witnessing a critical phase of economic transformation, where the conflict between major powers is no longer limited to politics or militarization, but has shifted to the economy—particularly the energy sector—as the main arena of confrontation. With the escalation of U.S. sanctions on both India and China over their purchase of Russian oil, the outlines of a multipolar global economic order are beginning to take shape, challenging the traditional system led by the United States for decades. These changes are not temporary; they carry long-term implications for the structure of global trade, energy prices, and economic alliances.
U.S. sanctions and their implications
In a controversial move, U.S. President Donald Trump imposed an additional 25% tariff on imports from India, justifying the decision as a penalty for New Delhi’s continued purchase of discounted Russian oil despite the war in Ukraine. Reports suggest that China may face similar sanctions, given that it is one of the largest importers of Russian oil. Together, India and China purchase over 4.3 million barrels of Russian oil daily, granting their economies an energy cost advantage over competitors. India alone saved about $33 billion between 2022 and 2024 thanks to Russian discounts.
India’s stance: A careful balance of power
India has taken a firm position, refusing to halt Russian oil imports, asserting that its decisions are based on securing energy for its 1.4 billion people and safeguarding national interests. Despite U.S. criticism, New Delhi accused the West of “hypocrisy,” pointing out that the European Union still imports Russian energy, albeit at reduced levels. India’s long-term policy focuses on balancing relations with the United States, Russia, and China without fully aligning with any single side—making the sanctions decision a true test of its oil diplomacy.
China: An indispensable partner in the energy equation
China, for its part, will not stop purchasing cheap Russian oil due to the connection between energy supplies and its long-term strategic goals. The relationship between Beijing and Moscow in this sector goes beyond simple trade; it is a strategic partnership designed to ensure stable supplies for the world’s second-largest economy. Even in the face of U.S. threats, analysts expect China to continue relying on Russian oil, especially with the availability of alternative trade networks such as the “shadow fleet,” which bypasses international monitoring.
Contours of the new global economy
This conflict signals a gradual shift toward a divided global economy consisting of two blocs:
The West, led by the United States and Europe, focusing on reducing Russian influence and punishing those who deal with it.
The Eastern bloc, led by China and Russia, with India partly aligned, focusing on securing resources and building flexible alliances outside Western dominance.
Key features of this shift include:
Fragmentation of supply chains, with some trade and energy routes moving to alternative networks.
Greater use of local currencies in international trade, potentially weakening the dominance of the U.S. dollar.
A shift in the economic center of gravity toward Asia while innovation continues in the West.
Intensified competition for resources, leading to greater volatility in global prices.
Conclusion
The world stands on the threshold of a new economic order, not based on the absolute dominance of a single power, but on a complex multipolarity governed by national interests and flexible alliances. With the global energy crisis ongoing, India, China, and Russia will remain at the heart of the equation, while the United States seeks to preserve its leadership role through economic pressure. The coming years may witness a complete redrawing of the global trade map, with oil and energy becoming the keys to reshaping the balance of power.
Economic Studies Unit / North America Office
Al-Rabetat Center for Research and Strategic Studies