FILE PHOTO: A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019.
| Photo Credit: Reuters
U.S. President Donald Trump on Sunday threatened Russia with sanctions on their oil imports should they not agree to “make a deal” to cease their actions in Ukraine. Speaking to North American broadcaster NBC, he exuded similar thoughts about Iran over the Islamic Republic’s stand over a nuclear deal. While oil prices have held steady at present, the chain of events could have potential implications to the global oil supply, including India which relies on imports to fulfil 88.1% of its requirements.
Top supplier
According to an analysis from the Union Bank of India utilising sourced data, India’s oil imports from its present topmost supplier, Russia, declined 14.5% in February to 1.43 million barrels per day. This was its lowest since January 2023. Furthermore, Russia’s share in India’s imports too slid to about 30% in the mentioned period. This was much lower than the about 38% average observed in 2024. However, imports from other key West Asian suppliers like Saudi Arabia and UAE also declined sequentially.
Should the Russian reversal continue, it would be a significant shift going ahead considering India spiked its purchase following their actions in Ukraine. India was guest to a favourable shift in the economics of this trade as Moscow was discounting the fuel to assert its attractiveness amidst sanctions from the West. Union Minister Hardeep Singh Puri, back in September 2022, too had underlined that India would continue to buy oil from the sanctioned country. He held it as part of his “moral duty” to the nation.
According to data from the International Energy Association (IEA), Russia supplied 0.1 mb/d crude oil in 2021 which spiked to 1.9 mb/d in 2024. In the years between, the same had peaked to 2 mb/d in 2023 from 0.9 mb/d in 2022.
China was Russia’s top export destination in 2024 seeking 2.4 mb/d, followed by India, Turkey (0.8 mb/d) and European Union (0.4 mb/d), among others.
Diversification strategy
India is the third largest oil importer in the world with consumption slated to continue the upward trajectory in the future. Mr. Puri had recently apprised the parliament that India is presently importing from 39 countries with another addition soon. According to data collated by news agency Reuters, Iraq was India’s second largest oil supplier followed by Saudi Arabia and United Arab Emirates.
Underlining the approach to procurement, he stated, “We can leverage the market consumption cart to diversify and buy from the cheapest source.” Furthermore, separately in a written response Mr. Puri stated that Indian oil PSUs were diversifying to procure from various geographical locations, namely, Middle East, Africa, North America, South America etc.
Published – March 31, 2025 08:04 pm IST
