US crude shipments to India dropped 37% month-on-month and 38% year-on-year to just 230,000 barrels per day (bpd).
At the same time, India imported 1.7 million bpd from Russia, up 6% from July, though still 4% lower than a year earlier. India’s overall crude imports stood at 4.5 million bpd in August, lower than the previous month.
This, even as trade relations got worse with Washington, which imposed an additional 25% tariff on imports from India, which came into force on August 27, for alleged large-scale purchases of discounted Russian oil despite Western sanctions.
India, however, refuted these allegations, maintaining that its crude buying strategy is driven by national energy security needs and cost competitiveness. Condemning the tariffs as “unfair and unreasonable", India claimed that the US and Europe’s own imports from Russia.
Also read: Amidst US' threats, India signs MoU with Russia to deepen cooperation across sectors
The Asian country is the world’s third-largest oil importer and sources over 80% of its crude from abroad. Since 2022, Russian oil has risen from a marginal share to account for more than a third of Indian imports, displacing supplies from the Middle East and the US.
Russian oil, which accounted for less than 0.2% of India’s imports before the Ukraine war (2022), now makes up 35-40% of the country’s crude intake.
According to earlier reports, the increase in Russian flow was at the cost of purchases from Iraq, which declined to 730,000 bpd in August from 907 bpd in July, and Saudi Arabia, which fell to 526,000 bpd from 700,000 bpd last month.
Moreover, Russian oil exports to India are expected to rise in September, Reuters reported, citing dealers. The tariffs are part of a broader trade discussion between India and the U.S., and given India’s increasing domestic refinery runs amid discounted Russian barrels, we don’t see India scuppering its Russian imports in meaningful volumes, the report cited BNP Paribas as saying.
Also read: Chinese refiners sweep up Russian oil after Indian demand falls, analysts say
While this may not sit well with the US, both countries are negotiating a bilateral trade agreement (BTA) that will likely be finalised by November this year, according to India’s Commerce and Industry Minister Piyush Goyal.
