Crude Oil Imports: 3 Key Reasons US Shipments Surge Dramatically Before the Tariff War
India has taken a significant step in strengthening its trade relations with the United States by increasing crude oil imports even before the official implementation of a potential tariff war. This strategic move is seen as a safeguard against the economic impact of rising trade tensions between the two countries.
Surge in US Crude Oil Imports
According to government data, India’s crude oil imports from the US surged to 228,400 barrels per day in January, a sharp increase from 70,600 barrels per day in December. This marks a threefold rise in imports following the election of Donald Trump as the US President.
With this increase, the US has now become India’s fifth-largest crude oil supplier. In 2024, India imported $15 billion worth of crude oil from the US, with a target to increase this figure to $25 billion in 2025. As the world’s third-largest crude oil importer, India is diversifying its energy sources to ensure stability amid geopolitical uncertainties.
Russia Remains the Top Supplier
While US crude oil imports have risen, Russia remains India’s top oil supplier, with imports increasing by 4.3% to 1.58 million barrels per day last month. However, the situation is likely to change due to US sanctions on Russian crude oil exports. Indian refiners may soon reduce their purchases from Russia and instead buy oil from suppliers not affected by these sanctions.
For more on India’s crude oil trade, check out Reuters’ report on India’s oil imports.
Oil Prices and the Tariff War
In November, India was paying $81.24 per barrel for Russian crude, benefiting from a 20-25% discount. However, crude prices have dropped following the Israel-Hamas conflict, with current prices at $74 per barrel. Meanwhile, the price of crude oil in Texas is $70.83 per barrel, making US imports costlier for India.
Despite this cost factor, India continues to import from the US, partly to maintain trade balance and avoid facing harsh tariffs from the US government. This move comes amid Donald Trump’s aggressive stance on global trade, where he has warned of a “do-or-die” trade war.
To understand the impact of US sanctions on Russian oil, read this analysis by CNBC.
India’s second-largest crude oil supplier remains Iraq, which is helping bridge the gap as India navigates a shifting energy landscape. Moving forward, India’s ability to secure stable energy supplies while balancing global trade tensions will play a crucial role in its economic strategy.
For further insights, you can explore the Indian Ministry of Petroleum’s latest updates.
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