India’s reliance on Russian crude oil is diminishing, with imports seeing a noticeable decline. This shift coincides with an increase in oil shipments originating from the United States. According to recent reports, Russian crude deliveries to India decreased by 8.4% between April and September. This downturn follows a strategic decision by Washington to implement a 25% tariff on oil sourced from Moscow, impacting global trade dynamics.
The global oil market is experiencing a tightening, and Russian suppliers are offering less attractive discounts. Consequently, Indian refiners are actively seeking alternative sources, with a growing preference for oil from the Middle East and the United States. This realignment marks a significant departure from previous trade flows that were heavily oriented towards Russia.
Diplomatic pressure from Washington has also been a contributing factor. White House Trade Advisor Peter Navarro had previously stated that India’s continued crude purchases from Russia were effectively financing the conflict in Ukraine. This stance has undoubtedly influenced New Delhi’s purchasing decisions.
Shipping data indicates that during the first half of the current fiscal year, a major Indian refinery imported approximately 1.75 million barrels of Russian crude daily. In September, these imports remained steady at 1.6 million barrels per day, representing a 14.2% year-on-year reduction compared to September of the previous year.
While private entities like Reliance Industries Limited and Nayara Energy increased their Russian oil intake in September, state-owned refiners have consequently scaled back their purchases. U.S. trade negotiators have emphasized that a reduction in Russian imports is crucial for lowering tariffs and finalizing pending trade agreements with India.
Between April and September, India’s crude oil imports from the United States saw a 6.8% increase, averaging around 213,000 barrels per day. Overall, India’s total crude imports in September reached 4.88 million barrels per day, a slight 1% decrease from August but a 3.5% rise compared to the same month in the prior year.
Russia’s share of India’s total oil imports has fallen from 40% to approximately 36% over the six-month period. The United States has gained ground, while oil from the Middle East now constitutes 45% of India’s imports, up from 42%. Collectively, OPEC nations have expanded their share from 45% to 49%.
This evolving energy landscape highlights India’s strategic diversification of its oil portfolio amidst global economic uncertainties and diplomatic maneuvers. The United States appears to be a primary beneficiary, solidifying its position in a market previously dominated by Russian supplies.
