India's oil imports from US to rise by 11% amid criticism over Russia purchase
- India buys most of its oil from the Middle East, but the US has emerged as the fourth-biggest source.
- Oil imports from the US to 11% this year as the country looks to secure supplies from around the world, including heavily sanctioned Russia.
- The surge in oil prices following Russia's invasion of Ukraine last month threatens to fan Indian inflation, stretch public finances and hurt growth.
India-US oil trade background
- The United States became the fourth-largest supplier of crude oil to India in 2020.
- The US supplied 10.7 million tonnes of crude oil to India in 2020.
- US supply accounted for about 5% of India’s total imports, a big jump for the country which had started exporting oil to India in 2017.
- It also turned out to be the fourth-largest natural gas supplier to India in 2020.
- Russia offered crude oil and other commodities at discounted rates to India.
- The jump in global fuel prices since the beginning of the conflict in Ukraine has added to India’s challenges.
- The pressure for competitive sourcing has increased.
Current India-Russia crude oil trade
- Russian oil exports to India quadrupled in March.
- Russia has so far exported 360,000 barrels of oil a day to India in March (four times the 2021 average).
- India's move to buy oil from Russia against which several nations have imposed sanctions - led to raised concerns from the US.
- Western sanctions have carve-outs to avoid any impact on energy imports from Russia.
- Russian banks that process payments for these sales remain on the SWIFT network.
- Countries with oil self-sufficiency or those importing themselves from Russia cannot credibly advocate restrictive trading.