India–US oil trade

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 India–US oil trade

🇮🇳 Strategic Shift in India’s Oil Imports

  • Dramatic rise in US crude imports
    From January to April 2025, India imported about 6.31 million tonnes of US crude—a massive 270% year‑on‑year increase from ~1.7 million tonnes in the same period of 2024 (The Indian Express). In value terms, that’s roughly USD 3.78 billion, up from ~USD 1 billion in early 2024 (The Indian Express).

  • US becomes India’s 4th largest crude supplier
    In April 2025, the share of US crude reached 0.33 million barrels per day (mbd), doubling from ~0.17 mbd in April 2024—surpassing the UAE in rankings. However, Russia remains India’s dominant supplier (The Indian Express, The Times of India).

  • Annual numbers underscore growth
    In 2024, US crude exports to India totaled roughly USD 3.91 billion, positioning the US as the fifth-largest value‑based supplier after Russia, Iraq, Saudi Arabia, and the UAE (tradingeconomics.com).



⚖️ Drivers Behind This Rebalancing

  • Geopolitics and sanctions pressure
    Indian refiners paused Russian oil purchases in late July 2025 as global discount spreads narrowed and the US ramped up warnings and tariff threats tied to Russian oil and military deals (theguardian.com, Reuters).

  • Trade leverage in bilateral negotiations
    During PM Modi’s February 2025 visit to the US, India committed to increasing US oil/gas imports as part of broader efforts to rebalance trade ties and hit a joint target of USD 500 billion bilateral trade by 2030 (en.wikipedia.org).

  • Strategic diversification amid risk
    Given India’s >88% crude import dependence and high exposure to Russia, importing from the US helps India hedge supply and pricing risk across geopolitical flashpoints (The Indian Express).

  • Tender-based procurement by refiners
    In early 2025, BPCL launched a four-month tender to purchase 1 million barrels per month of US-origin WTI crude—highlighting active state-level energy sourcing shifts (Reuters).



📉 Key Challenges and Risks

  • Tariffs and trade friction
    As of August 1, 2025, the US applied 25% tariffs on Indian goods, partly in response to India’s purchases of Russian oil. Secondary penalties for continued energy ties with Russia were also threatened—raising political and economic stakes in energy trade (apnews.com).

  • Domestic backlash
    India’s opposition parties criticized the government following rising tensions over US tariffs, arguing it reflects a failure in trade diplomacy. Markets reacted with concerns over rupee depreciation and slowing economic indicators (Reuters).

  • Sustainability of Russian suspension
    While state refiners paused Russian crude uptake, private players such as Reliance and Nayara continue sourcing from Russia under existing contracts, limiting the extent of diversification (Reuters).

🧭 Looking Ahead

Focus Area What to Watch
Trade Deal Progress Are India–US talks on track for an interim energy‑focused agreement by fall 2025? Will US tariffs be rolled back or eased? (Reuters)
Import Share Trends Will the US continue to climb India’s supply rankings beyond fourth place, perhaps overtaking Iraq or Saudi Arabia?
Price & Discount Dynamics Will Russia regain USD share as European sanctions pricing stabilizes, or will US WTI remain competitively favoured?
Domestic Refinery Strategies To what extent will state versus private refiners diversify away from Russia in the long run?

✅ Summary

India’s oil imports from the US have surged in 2025, rising more than 270% year‑on‑year—shifting the US into the top five exporters to India. This trend reflects India’s strategic energy diversification amid US economic pressure and evolving geopolitical dynamics. However, supplier rankings are still dominated by Russia, and ongoing trade tensions pose both risks and leverage points. Policy decisions, tender outcomes, and tariff negotiations through the rest of 2025 will likely shape India–US oil trade moving forward.

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