India ramps up US oil purchases amid trade talks, diversification push

Crude oil shipments loaded in the US for India delivery have jumped significantly in the past two months, August and September 2025, signalling New Delhi’s approach of boosting energy trade with Washington amid ongoing bilateral trade talks.

 

Crude oil loading refers to volumes of oil loaded at a producing country’s port for respective destinations. Oil shipments loaded in the US typically take around two months for delivery in India.

 

Loadings of crude oil headed for India stood at an average 398 thousand barrels per day (kbpd) in August and 341 kbpd in September, according to data sourced from maritime intelligence firm Kpler. This is a huge jump from 254 kbpd loadings witnessed in June and 166 kbpd in July.

 

The US has levied an additional 25 per cent tariff on India, taking the total tariff to 50 per cent, for purchasing Russian oil, arguing India is indirectly funding the Ukraine war. India has maintained that it would prioritise national interests and economic security.

 

Commerce and Industry Minister Piyush Goyal had last week hinted that India could buy more crude oil from the US. Speaking at the US-India strategic partnership forum, Goyal had said India’s energy security goals will have a “very high element” of US involvement.

 

India, a large crude oil importer, has been focusing on diversifying sources in an effort to shield itself from geopolitical shocks. While increasing the share of US crude oil helps the country in diversifying, higher freight costs remain a challenge for Indian refiners to boost purchase from Washington.

 

“India has limited upside taking significantly higher US volumes. US grades face both logistical disadvantages and compatibility challenges with Indian refining systems, which makes a material swing toward American crude oil unlikely,” said Sumit Ritolia, lead research analyst, refining & modelling, at Kpler.

 

Meanwhile, despite pressure from the West, Indian refiners continue to rely heavily on discounted Russian oil. India-bound Russian oil loadings were healthy at 1.5 million bpd in August and September, though a marginal dip from previous months. Crude oil loadings from Russia for Indian ports stood at 1.6 million bpd and 1.7 million bpd in June and July, respectively.

 

“It is improbable that India will implement structural cuts (on Russian oil imports) purely to satisfy US and EU political pressure. If Washington intensifies pressure, Indian refiners could make a token reduction, of the order of 100-200 kbpd, to demonstrate diversification and appease western partners, but these cuts would likely be symbolic rather than transformative,” said Ritolia.

 

Russia’s sour grade crude Urals trade at a cheaper landed cost for Indian refiners compared to most alternatives in the market.