India’s refiners could increase purchases of crude oil from the United States if American prices remain competitive with those of leading Middle Eastern suppliers, according to people familiar with the ongoing discussions.
One of the sources said that US crude prices are expected to align more closely with the rates offered by producers such as Saudi Arabia and other Gulf nations. “If the import volume is significant, prices naturally stay close to market levels,” the person noted.
Although oil from the United States might be slightly costlier than Russian crude, Indian lenders have grown cautious following recent Western sanctions targeting Russia’s two largest energy firms.
Last month, the US Treasury blocked international transactions involving Rosneft and Lukoil, citing their links to Moscow’s war efforts in Ukraine. The European Union followed with new energy restrictions, including a total ban on Russian liquefied natural gas (LNG) imports from January 2027 under long-term contracts.
Officials familiar with bilateral trade talks said India has conveyed to Washington that it is open to increasing oil imports from the US, provided prices remain competitive — ideally close to the rates offered by Russia or the Middle East.
India’s Current Oil Mix
Russia remained India’s top crude supplier in October (till October 15), with imports at around 1.8 million barrels per day — about 250,000 barrels higher than the previous month, according to industry data. Supplies from Iraq, Saudi Arabia, and the UAE followed in order.
At the same time, India’s crude imports from the US rose sharply, reaching 0.6 million barrels per day in the first half of October — up from 207,000 barrels per day in September.
Commerce Secretary Rajesh Agarwal recently indicated that India could add another $14–15 billion worth of annual energy imports from the US, consistent with its diversification strategy.
As of 2:20 pm on November 3, Brent crude — the global benchmark — traded at $64.85 per barrel, while the US West Texas Intermediate (WTI) benchmark was lower at $61.04 per barrel. However, freight costs make a significant difference when comparing imports from different regions.
Freight and Pricing Dynamics
According to energy market experts, freight from the US to India costs about $3 per barrel, compared with roughly $0.70 per barrel from the Middle East — mainly due to the longer voyage of about 25 days versus five days from the Gulf region.
The price advantage for Russian crude stood around $2 per barrel in late October, while Middle Eastern grades such as Arab Light and Arab Heavy fluctuate $3–5 per barrel above or below Brent depending on sulphur content and quality.
Tariffs and Trade Talks
India continues to face a 50 percent tariff on most exports to the US, including an additional 25 percent levy linked to Russian oil imports. New Delhi and Washington are negotiating a trade agreement, expected to conclude later this year.
Sources suggested that higher US crude imports could support India’s case for the removal of the additional tariff. US President Donald Trump recently said India might scale back Russian crude purchases as part of the ongoing trade discussions.
Currently, Russia supplies about 34 percent of India’s total oil demand — a dramatic rise from just 0.2 percent before the Ukraine conflict in 2022. The Indian government has not directed refiners to cut Russian oil imports, leaving the decision to companies based on pricing and commercial considerations.
