US crude oil exports jump in hope for India as trade treaty deadline nears

India increased imports of all products from the United States by 27 per cent in value terms during the first two months of FY26, driven largely by a 38 per cent surge in crude oil purchases led by state-run Indian Oil Corporation. The spike comes ahead of the 9 July deadline to conclude the first phase of a bilateral trade agreement, according to exclusive shipping and customs data accessed by Business Standard, and conversations with refiners.

 

The rise in imports may help convince the administration of President Donald Trump of India’s intent to expand energy trade with the US—despite the fact that American crude is, on average, $7–8 per barrel (around 10 per cent) costlier than discounted Russian or Iraqi grades, based on customs data estimates.

 

Total imports from the US stood at $8.9 billion in April–May 2025, up from $7 billion in the same period a year earlier, Indian customs data showed. While May figures for US crude are not yet available, April data show that oil accounted for 42 per cent of the $5.2 billion in total US imports that month—highlighting energy’s centrality in India’s trade basket with the US. 

 

“India can develop into a huge energy market for US producers,” said a senior trader from a state-run refiner. The International Energy Agency (IEA) stated in a report released today that India’s economic growth will remain largely uninterrupted, with GDP growth averaging 6.4 per cent over the forecast period. Oil demand is projected to rise steadily as urbanisation, industrialisation and evolving consumer patterns make the economy more energy intensive.

 

According to customs data, US crude cost around $82 per barrel on a delivered basis during January–April 2025, compared to $75 per barrel for discounted Russian grades and $74 for Iraqi Basrah oil. India paid $3.8 billion for US crude in that four-month period. Washington has repeatedly emphasised oil and gas exports as a way to narrow the $41 billion trade surplus India runs with the US.

 

India’s crude imports from the US rose 17 per cent month-on-month in June to 310,000 barrels per day (bpd), rebounding from a February low of 145,000 bpd, shortly after Trump announced a 25 per cent reciprocal tariff on Indian exports, according to data from maritime intelligence agency Kpler. Average imports for January–June 2025 stood at 274,000 bpd, with Indian Oil accounting for half the total crude purchased.

 

LNG imports fall

 

In contrast, India’s liquefied natural gas (LNG) imports from the US have lagged. Total LNG volumes stood at just 1.2 million tonnes in the first six months of 2025. At this rate, annual imports are projected to reach only 2.5 million tonnes—down from 5 million tonnes in 2024 and even below the 3 million tonnes recorded in 2023, according to Kpler.

 

In value terms, US LNG imports between January and April fell 73 per cent to $136 million from $496 million a year earlier, customs data showed—effectively offsetting the boom in crude oil imports. A senior official at a state-run oil company attributed the decline to higher prices. 

 

“India is highly sensitive to LNG prices. Consumers here are comfortable with anything below $10 per million British thermal units,” Petronet LNG CEO A K Singh said at a recent event.

 

US LNG prices, linked to the Henry Hub benchmark, have risen on a delivered basis due to increased benchmark rates and higher shipping costs. All US cargoes to India now reroute around the Horn of Africa, as the more direct Suez Canal route remains compromised due to control by Iran-linked Houthi rebels.

 

The monthly average Henry Hub spot natural gas price in 2024 ranged from $3.25/MMBtu in January to an all-time low of $1.51/MMBtu in March, averaging $2.21 for the entire year. The Henry Hub spot price averaged $3.70 in the first quarter of 2025, and EIA forecast the average to climb to around $3.80 for the year.