New Delhi: India’s oil ministry and state-run energy companies are preparing for a sharp increase in imports from the US under a bilateral trade deal, even as crude oil purchases from Russia are likely to fall significantly, said people familiar with the discussions.
Senior executives at state-owned refiners and gas marketers met ministry officials this week to assess how much additional crude and natural gas can be sourced from the US, already a key supplier to India.
With domestic demand expanding and Russian supplies expected to be curtailed, state refiners are likely to carry most of the adjustment, even if it entails absorbing higher freight costs at times, the people said. The freight gap — typically more than $2 a barrel compared with West Asian cargoes — means US crude is competitive only when discounts to Brent are wide enough to offset shipping costs.
Following Prime Minister Narendra Modi’s visit to the US last February, President Donald Trump outlined Washington’s ambition to become India’s leading supplier of oil and gas. Foreign secretary Vikram Misri later said the aim is to raise energy imports from the US to $25 billion, from about $15 billion.
US crude shipments to India have already risen sharply, up about 60% to around 318,000 barrels a day in 2025, according to Kpler. India has also diversified liquefied petroleum gas (LPG) sourcing, moving beyond its traditional Middle East suppliers to sign a deal last December with US exporters for 2.2 million tonnes of cooking gas this year.
Russian Situation Dynamic
US crude shipments to India have already risen sharply, up about 60% to around 318,000 barrels a day in 2025, according to Kpler. India has also diversified LPG sourcing, moving beyond its traditional Middle East suppliers to sign a deal last December with US exporters for 2.2 million tonnes of cooking gas this year, around 10% of its LPG imports. The US is also a major supplier of LNG to India.
Over the coming months, India’s oil supply lines are expected to tilt away from Russia towards the US.
Indian refiners are set to sharply cut fresh orders for Russian crude, though imports won’t stop entirely, the people said. Cargoes already contracted are expected to be delivered by March. “It’s a dynamic situation. For now, expect fresh Russian orders to fall, though this could change again in a few months,” said one of the persons cited above.
The decision to procure more Russian crude — initially influenced four years ago by deep discounts — is now as much diplomatic as commercial, said a second person familiar with the government’s thinking. Operationally, replacing Russian barrels poses little challenge for refiners. The key uncertainty is where the displaced Russian crude flows. If China absorbs those barrels at deeper discounts, other supplies could be freed up for India, keeping global balances and prices stable, the person said. If not, and Russian output is hit, tighter supply could push prices higher, he added.
In January, only Indian Oil, BPCL and Rosneft-backed Nayara Energy received Russian cargoes, with volumes that month already down about 30% from the 2025 average.
Boosting energy exports has been a central plank of Trump’s approach to narrowing US trade deficits. Rising US oil and gas output has pushed Washington to seek large, fast-growing markets such as India. For India, energy imports offer a lever that can be ramped up quickly with limited political cost.
On gas, state-run GAIL has long-term contracts for 5.8 mt a year with US suppliers, though high freight costs often make these cargoes uneconomical for Indian consumers, leading to swaps or resale overseas. GAIL is now exploring another long-term US LNG deal, while other Indian gas companies continue to tap the US spot market when pricing allows.
