India's crude oil imports from the US reached their highest level since 2022 in October, amounting to 540,000 barrels per day. This move is considered part of a strategy to reduce dependence on Russia, diversify supplies, and ease trade tensions with the US. Russia remains India's largest oil supplier.
Crude Oil Import: India increased its crude oil imports from the US to a three-year record level in October. According to Kpler's data, these imports reached 540,000 barrels per day, while in November, they are expected to be between 400,000-450,000 barrels per day. This increase is part of efforts to reduce dependence on Russia and ease trade tensions with the Trump administration. Russia continues to be India's largest crude oil supplier, with Iraq and Saudi Arabia ranking second and third, respectively.
Record Imports from US in October
According to data from energy analytics agency Kpler, India purchased approximately 5.40 lakh (540,000) barrels per day of crude oil from the US until October 27. This marks the highest level since 2022. US export figures indicate that the entire month of October could conclude with an average of 5.75 lakh (575,000) barrels per day. In November, this figure is likely to decrease slightly to 4 to 4.5 lakh (400,000-450,000) barrels per day. This volume is significantly higher than last year's average of 3 lakh (300,000) barrels per day.
This increase is seen as India's attempt to diversify its supply chain and reduce dependence on Russia. The primary reasons cited for the rise in oil purchases from the US are economic benefits and the widespread price differences in the global market.
Russia Remains the Largest Oil Supplier
Although purchases from the US have increased, Russia still remains India's largest crude oil supplier. India's total oil imports from Russia account for approximately one-third of its overall imports. Iraq is in second place, and Saudi Arabia is third.
Sumit Ritolia, Kpler's refining, supply, and modeling specialist, stated that the increase in US oil imports is driven by economics. The main reasons behind this are the significant price difference between Brent and WTI crude, lower demand from China, and swift decision-making by Indian refineries.
Refineries Increase Booking of US Oil
Indian public and private refineries have increased their bookings for US-grade oils, such as Midland WTI and Mars, in recent months. The objective is not only to reduce dependence on Russia but also to signal cooperation to the US.
According to information, Indian refineries are facing challenges in purchasing from Russian oil companies Rosneft and Lukoil. Western sanctions against Russia have complicated processes such as payments and insurance. In this scenario, US supplies have emerged as a stable alternative.
Efforts to Reduce Trade Tensions
Another significant reason behind India's increased US oil imports is considered to be the improvement of trade relations. Recently, the Trump administration had raised tariffs by up to 50 percent on several goods imported from India. This move had escalated trade tensions between the two countries. By increasing US oil purchases, India is now trying to strengthen coordination with Washington.
New Delhi's strategy focuses on maintaining a balance with both the US and Russia while ensuring energy security. India has always prioritized diversifying energy sources to mitigate the risk of over-reliance on any single country.
Why This Surge Might Be Limited
Although this surge in US oil purchases is noteworthy, experts believe that a significant further increase is unlikely. According to Sumit Ritolia, this surge is not permanent but arbitrage-driven, meaning it is a temporary increase made to capitalize on price differences.
The long voyage from the US, higher freight costs, and the light naphtha-rich nature of WTI grade oil also impose limitations. Indian refineries find heavy-grade oil more suitable as it leads to better production of diesel and other products.
