← External Forces: Trade, Geopolitics & Market Access (all topics)
Sanctions & secondary sanctions exposure
What it is
Restrictions on trading with a sanctioned country, and the risk that doing so triggers penalties from a third country. Indian refiners buying discounted Russian crude, and exporters using dollar clearing, both sit inside this exposure
Compliance is judged by the sanctioning state rather than by the trade's own legality
Impact on industries
- A commercially sound trade can become uncommercial overnight if a counterparty, vessel or bank is designated
- Payment, insurance and shipping are the practical chokepoints, so a trade can be legal yet impossible to execute
- Sanctioned supply usually trades at a discount, which is why Russian crude transformed Indian refining economics after 2022
- That discount is the compensation for risk, and it disappears when the sanction is negotiated away - as the Feb 2026 tariff understanding showed
- Sanctions have become an instrument of trade negotiation rather than only of security policy, so exposure is now a commercial planning variable