India boosts US crude oil imports to 540,000 bpd, highest since 2022

India's record US crude imports come amid efforts to diversify away from Russian oil and manage trade frictions with Washington

India imported 540,000 barrels per day (bpd) of crude oil from the United States (US) in October, its highest since 2022, according to data from maritime intelligence firm Kpler as of October 27.

 

According to US export data, October is expected to close at around 575,000 barrels per day (bpd), while November is projected to reach between 400,000 and 450,000 bpd, marking a sharp rise from the year-to-date average of about 300,000 bpd.

 

Sumit Ritolia, lead research analyst for refining, supply & modelling at Kpler, said that the current surge is primarily driven by economic reasons.

 

"The increase was economics-driven, supported by a strong arbitrage window, a wider Brent-WTI spread, and no Chinese demand, which made WTI Midland competitive on a delivered basis for Indian refiners," PTI quoted him as saying.

 

Brent is a global oil benchmark, while WTI is a US oil benchmark. WTI Midland is a type of US crude oil.

 

The move comes on the back of US President Donald Trump imposing sweeping 50 per cent tariffs on India, half of which is a punitive duty for importing Russian oil. It can be seen as New Delhi's effort to diversify its exports from Russia to ease trade tensions with Washington. 

 

Russia still the largest supplier

Russia, however, continues to be the largest supplier of crude oil to India, with average deliveries of around 1.75 million bpd. Iraq ranks second, followed by Saudi Arabia. These imports, however, could be affected by the recent sanctions imposed by the Trump administration on Russia’s top oil producers — Rosneft and Lukoil — which together account for about 60 per cent of India’s total crude imports from Russia.

 

Challenges from imports from US

While increasing the share of US crude oil helps the country diversify, higher freight costs remain a challenge for Indian refiners to boost purchases from Washington.

 

On this, Ritolia said that a further increase in buying from the US can be limited. "While the surge underscores India's refining flexibility and ability to capture short-term opportunities, the current rise is arbitrage-led, not structural, as longer voyage times, higher freight, and WTI's lighter, naphtha-rich yield limits increased buying," he said.

 

(With PTI inputs)