India’s crude oil imports from the United States reached their highest level since March 2021 (over four years) in October. According to maritime and trade data firm Kpler, Indian refiners imported approximately 593,000 barrels per day (bpd) of U.S. crude oil in October — up significantly from about 207,000 bpd in September. This accounts for around 12% of India’s total crude oil imports in October (~4.81 million bpd).
What’s Driving the Surge in U.S. Crude Imports
- Economic arbitrage: The large spread between Brent and WTI (West Texas Intermediate) oil prices, combined with weak Chinese demand, made U.S. grades more attractive for Indian refiners.
- Supply diversification: India is increasingly seeking to recalibrate its crude-oil sourcing towards a more diversified basket — adding U.S. and Latin American barrels alongside its traditional suppliers.
- Geopolitical signalling: Amid global scrutiny (particularly around Russian oil imports), this up-tick in U.S. imports may also reflect India’s efforts to maintain diplomatic balance while ensuring energy security.
Background Context
- Russia remains India’s largest crude oil supplier with about 1.62 million bpd in October (~34% of total imports) according to Kpler. Business Today
- The shipping journey from the U.S. to India typically takes 45-55 days, which means some of the October U.S. cargoes were likely contracted earlier.
- While this is the highest U.S. import level in over four years, pundits caution that freight costs, voyage time and WTI’s lighter crude make large–scale substitution challenging.
Implications & Significance
For India’s Energy Strategy
- The move signals a shift in the supply mix and reinforces India’s ambition for energy security through diversification.
- India demonstrates willingness to exploit economic opportunities (lower cost barrels) rather than relying solely on traditional suppliers.
- The enhancement of U.S. imports adds strategic flexibility amidst evolving sanction and trade regimes.
For Global Oil Markets
- The increased U.S. exports to India highlight how global flows are becoming more dynamic, particularly with refiners adapting to arbitrage opportunities.
- This may influence future supply-contract negotiations, refining economics and shipping logistics for U.S. crude.
For Refiners & Costs
- Access to U.S. crude may help reduce cost of landed oil if economics remain favourable.
- However, high freight costs, longer shipping, and potential quality/yield differences may limit scale of U.S. supply.
What to Monitor Going Forward
- Whether the U.S. import volume sustains or is a temporary spike: November/December volumes will provide clarity.
- The impact of upcoming U.S. sanctions on Russian oil firms (e.g., Rosneft and Lukoil) on India’s sourcing decisions.
- Refiners’ shift toward other regions (Latin America, West Asia) and how that affects the share of U.S. barrels.
- Any adjustments in India’s trade diplomacy tied to energy sourcing and import policy.
