India has asked its state-owned refiners to consider increasing purchases of US and Venezuelan crude oil following a trade agreement that the Trump administration said included a pledge to halt imports of Russian barrels, reported Bloomberg, citing refinery executives familiar with the matter.
The development places India’s energy procurement strategy under renewed global scrutiny as policymakers attempt to balance diplomatic commitments, supply diversification, and refinery economics.
New Delhi has not publicly confirmed any formal commitment to end Russian purchases, maintaining that energy security remains its primary objective.
Washington later moved to cut tariffs on certain Indian exports.
New Delhi has not publicly confirmed any formal pledge to halt Russian purchases, maintaining that energy security and diversification remain the guiding principles of its procurement strategy.
The recalibration reflects both political signalling and commercial realities.
Refiners are weighing costs, refinery configurations, and freight economics as they reassess supply options.
Russian oil uncertainty
The debate intensified after Trump linked tariff reductions to India’s agreement to stop buying Russian oil.
According to US statements, Prime Minister Narendra Modi pledged no further Russian crude purchases as part of the broader trade arrangement. India has not echoed that language and has instead stressed diversification.
Refiners are now seeking clarity on future Russian flows. While existing long-term contracts continue, buyers are cautious about fresh spot purchases until policy direction becomes clearer.
The uncertainty has placed India’s oil-buying under international scrutiny, even as officials reiterate that procurement decisions are guided by national interest and supply security.
Push for US grades
State refiners have been urged to prioritise US crude when issuing spot tenders.
American grades are typically light and sweet, meaning lower sulfur content.
That creates technical limitations, as several Indian refining units are optimised for medium or heavier crude streams.
Industry executives estimate Indian processors could absorb around 20 million tons of US crude annually, equivalent to roughly 400,000 barrels per day. That would exceed last year’s daily imports of about 225,000 barrels, according to Kpler data.
Freight costs complicate the picture. Long-haul shipments from the US Gulf Coast increase transport expenses, limiting the cost-effectiveness of larger volumes.
Alternatives from West Africa and Kazakhstan remain commercially attractive due to shorter shipping distances.
Venezuelan supply re-emerges
Venezuela has also returned to the conversation. The Trump administration earlier asserted control over the country’s energy industry and tapped trading houses Vitol Group and Trafigura Group to market Venezuelan crude internationally.
Vitol has held discussions with refiners to gauge interest in renewed flows.
Indian state refiners, including Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp., recently purchased about 4 million barrels of Venezuelan oil.
Experts say that figure represents the practical monthly ceiling of heavy, sour Venezuelan crude that these refiners can process.
Unlike US grades, Venezuelan crude is heavier and more compatible with certain Indian refinery configurations.
Supplies are being arranged through private negotiations rather than public tenders.
India’s evolving crude mix reflects how trade diplomacy, refinery engineering, and freight economics are converging.
While diversification remains the stated objective, the scale and pace of change will depend on cost competitiveness, logistical feasibility, and clearer policy signals in the months ahead.
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